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Winery bill expected to be approved

Proposal would let small winemakers continue selling directly to restaurants

Thursday, April 6, 2006

A bill allowing small Maryland wineries to continue selling directly to restaurants and retailers was expected to pass the House of Delegates either late Wednesday or today, according to Kevin Atticks, executive director of the Maryland Wineries Association.

The original bill, introduced by Sen. Thomas McLain Middleton (D–Dist. 28) of Waldorf in February, preserved the right of Maryland wineries to sell directly to restaurants and retail outlets, which they have done since the early 1950s, and extended that right to small out-of-state winemakers. The bill was introduced in reaction to a ruling by Comptroller William Donald Schaefer (D) banning such direct sales. Instead, winemakers need to sell through a wholesale distributor, he said.

Schaefer’s action followed a U.S. Supreme Court decision last year leveling the sales field nationally between in-state and out-of-state wineries. Schaefer’s ruling was also prompted by a pending lawsuit by an out-of-state winery, claiming Maryland discriminates in favor of in-state winemakers.

Maryland winemakers, most of whom say they are too small to deal with wholesalers, have sought legislative relief from Schaefer’s ruling, due to take effect June 1.

The Senate unanimously passed Middleton’s bill, while a House version, though co-sponsored by a majority of delegates, was stuck in committee for weeks.

Middleton’s bill would allow all wineries producing less than 40,000 gallons annually to sell directly to retailers and restaurants.

After negotiations between wineries and wholesalers, the House Committee on Economic Matters struck a compromise, lowering that threshold to 27,500 gallons.

‘‘After a series of negotiations, that’s where we landed,” Atticks said.

Committee member Mary Ann E. Love (D-Dist. 32) of Glen Burnie also expected passage of the amended bill.

The lower limit will have minimal impact on Maryland wineries, at least in the near future. Currently, only a handful of in-state wineries produce at least 40,000 gallons a year, and they already sell through distributors.

Lowering the limit to 27,500 gallons could affect Elk Run in Mount Airy and Solomon’s Island wineries within the next year, as they approach that threshold.

Senate passage of the amended bill is expected. This year’s legislative session ends Monday.

Passage could help lead to ‘‘a $5 million to $100 million industry in the next five years,” Middleton has said. ‘‘Our job is to fix it, to preserve the wineries here in the state.”