Delaware Lawmakers Seek to End State Ban on Direct-to-Consumer Wine Shipping
Santa won’t be shipping wine to Delaware for at least one more holiday season. State Representative Mike Smith intends to change this with the introduction of a bill in the new 152nd General Assembly…
Rep. Smith said his proposal will deal solely with direct-to-consumer (DTC) sales — shipments sent from wineries to the homes of the buyers. It would not legalize online retail wine sales. State Rep. Jeff Spiegelman is expected to be a co-prime sponsor of the new bill.
More Information from the Press Release
In an age where nearly anything can be quickly delivered to consumers’ doorsteps, Delaware, Utah, and Mississippi remain the only three states in the nation prohibiting direct-to-consumer wine shipping – an option available to nearly 98% of Americans living elsewhere.
State Rep. Mike Smith, R-Pike Creek Valley, intends to change this with the introduction of a bill in the new 152nd General Assembly.
Rep. Smith said his proposal will deal solely with direct-to-consumer (DTC) sales — shipments sent from wineries to the homes of the buyers. It would not legalize online retail wine sales.
At present, Delawareans can only purchase wine through a process that channels all alcoholic beverage sales through a three-tier system of distributors, wholesalers, and retailers that was established following the repeal of Prohibition.
According to the National Association of American Wineries, there are more than 10,000 wineries in the U.S., but the overwhelming majority of these enterprises are low-volume operations – too small to have relationships with distributors, making it impossible to get their products in Delaware.
Rep. Smith said distributors and retailers have no economic incentive to engage in the fringe business of stocking or ordering niche wines. One Wine Institute survey indicates the nation’s top 50 largest wineries produce more than 90% of American wine. These are the products distributors carry and retailers place on their shelves and sell in volume.
State Rep. Jeff Spiegelman, R-Clayton, is expected to be a co-prime sponsor of the new bill. Noting that Delawareans can already get sensitive materials, such as prescription drugs, delivered to their front doors, he said Delaware is needlessly dragging its feet on direct wine shipping, depriving consumers of choice and the state of tax revenue.
There have been numerous attempts over more than a decade in Delaware to allow limited direct home shipment of wine. Most recently House Bill 210 was introduced by Reps. Smith & Spiegelman in May 2021. While the bipartisan proposal won release from a House committee last March, it died without being considered by the full chamber.
All efforts to reform Delaware’s nearly nine-decade-old alcohol sales laws have failed over objections from package store owners, distributors, and unionized distribution workers who have feared that DTC wine shipping would undermine retail sales.
Supporters of DTC wine sales note that it serves a fringe market specializing in wines not found in shops. Such transactions typically complement, rather than compete with, those made by local vendors. Impact studies done in Maryland and Virginia following the implementation of DTC wine laws in those states found that retail sales increased after enactment.
Delaware wineries – including Pizzadili, Nassau Valley, Salted Vines, and Harvest Ridge – are also currently 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. Ironically, these enterprises can ship their products to nearly everyone else in the country.
Rep. Smith said he is considering some changes to his last proposal, but that it will likely contain provisions of DTC laws that have been successfully implemented elsewhere. These include some of the following:
- Require carriers, like FedEx and UPS, to obtain special licenses to handle wine shipments.
- Require drivers to receive training on how to responsibly make wine deliveries.
- Mandate special labeling of the packages.
- Require licensing of wineries shipping their products to Delaware.
- Impose the same state alcohol taxes levied on retail sales.
- Restrict deliveries to adults over the age of 21 that must identify themselves and sign for the package.
- Set annual limits on the quantity of wine that wineries would be able to ship to individual households and to Delaware as a whole.
