(The Center Square) — Delaware is among a handful of states that bans shipments of wine and other alcoholic beverages to consumer’s doorsteps, but lawmakers are making another push to ease those restrictions.
A bipartisan group led by state Rep. Mike Smith, R-Pike Creek Valley, has refiled a bill for consideration in the upcoming legislative session that would, if approved, authorize direct-to-consumer wine sales to Delawearans.
Delaware is one of only three states, including Utah and Mississippi, that prohibit direct shipments of wine to consumers. Supporters of the legislation say the state’s three-tiered alcoholic distribution system, which dates back to the Prohibition era, hedges out small businesses.
They cite industry data showing a majority of the nation’s 10,000 wineries are low-volume operations that are too small to establish relationships with regional distributors, which prevents them from getting into the market.
As a result, he said, distributors and retailers have little or no economic incentive to try to crack into the business of stocking or ordering niche wines.
“This is a niche market,” Smith said in a statement. “The nation’s top 50 largest wineries produce more than 90 percent of American wine, but there are more than 11,000 wineries in the U.S., the vast majority of which are small businesses.”
The restrictions also hurt local wineries, Smith and other supporters say, which are also barred from shipping wine to Delawareans, “depriving them of a consumer base most likely to have visited their vineyards and been familiar with their products.”
Smith said the proposal includes safeguards like requiring FedEx and other carriers to obtain special licenses to handle wine shipments and state licenses for wineries that ship their products directly to consumers. Distributors would pay the same state alcohol taxes as those on retail sales and would be required to verify that the recipient is 21 or older, he said.
Another proposal, filed by state Rep. Jeff Spiegelman, R-Townsend-Clayton, would allow farms, breweries, microbreweries and other craft businesses to offer direct sales of wine, beer, spirits, mead and hard cider to consumers.
Previous efforts to lift the restrictions were opposed by package store owners, wine distributors and distribution workers, who have argued that direct wine shipping will hurt brick-and-mortar retail sales and cost jobs in the industry.
However, supporters of the legislation argue that the reforms wouldn’t result in lost sales for Delaware package stores. They cite a 2012 report by the Maryland Comptroller’s Office showing local retail sales jumped at least 3.6% after the state passed a law authorizing direct shipment of wine.
“Delawareans can already have all manner of goods shipped directly to their homes, including sensitive items, like prescription drugs,” Spiegelman said in a statement. “What these measures propose would not place Delaware on the cutting edge, but largely just bring us up to speed with what’s already in practice elsewhere.”
