Come March 31, Maryland wineries will be prevented from directly selling their wines to retail stores and restaurants.
The impending ban, based on a ruling by the state comptroller's office, would financially threaten most of the state's 22 wineries, which rely on orders from retailers and restaurants and cannot afford to go through a distributor. Seventy percent of Maryland wines are distributed by the wineries to retail stores and restaurants, according to the Maryland Wineries Association.
"It's a death knell for the smallest wineries," said Kevin Atticks, association executive director.
He defines small wineries as those which produce fewer than 40,000 gallons of wine per year, which applies to 18 of the state's wineries.
The comptroller's administrative ruling, according to the Baltimore Business Journal, "is essentially an interpretation of existing Maryland law and not a new law, said Gerald Langbaum, counsel for the comptroller's office and a state assistant attorney general. Though Maryland wineries had been selling directly for years, a new interpretation of the law was required in response to a landmark U.S. Supreme Court decision in 2005, Langbaum said.
"The ruling declared that states could not favor their own wineries over out-of-state vintners with regards to the distribution of wine. 'No one wants to put anyone out of business,' Langbaum said."
The ruling also was issued in response to a lawsuit filed against the state in 2005. In it, a Pennsylvania winery and a Silver Spring, MD, resident alleged that Maryland's sales laws, which allow in-state wineries to sell directly to retailers and restaurants while preventing out-of-state wineries from doing so, violates the U.S. Constitution.
Maryland wineries can sell to consumers, retailers and restaurants. Out-of-state wineries must go through a distributor.
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