FILE - Wine Bottles Cellar

Horizontal rows of wine bottles in a cellar

(The Center Square) – Delaware is one of only three states that prohibits shipments of wine to resident's doorsteps, but that could change with the upcoming legislative session. 

State Rep. Mike Smith, a Pike Creek Republican, said he plans to file a proposal to authorize direct-to-consumer wine shipping, and permit the state to collect sales and alcoholic beverage taxes on sales of the products. 

"To be clear, I am not proposing legalizing the online retail sale of wine,” Smith said. "My bill will deal solely with direct-to-consumer sales, with shipments sent from wineries to buyers."

Smith said the state's three-tiered alcoholic distribution system, which dates back to the Prohibition era, hedges out small businesses. He cites 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, "making it impossible to get their products in Delaware." 

As a result, he said, distributors and retailers have "no economic incentive" to engage in the fringe business of stocking or ordering niche wines.

“You can hardly blame them," he said. "The profit margins don’t justify the greater investment of resources when compared to marketing the top sellers for which there is a ready clientele and steady demand.”

The restrictions also hurt local wineries, Smith said, 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." 

"Ironically, these enterprises can ship to nearly everyone else in the country," he said. 

Smith filed a similar proposal in the previous legislative session, but it failed to gain traction, despite favorable reviews from key committees.

Another supporter, state Rep. Jeff Spiegelman, R-Clayton, said Delaware has become an outlier on direct-to-consumer wine shipping, which is "depriving consumers of choice and the state of tax revenue."

"Delawareans can already get sensitive materials, such as prescription drugs, delivered to their front doors," he said. "Meanwhile, our citizens cannot even join a wine of the month club, although we know some illicit shipments are taking place." 

The move is opposed by package store owners, wine distributors and unionized distribution workers, who have expressed concerns that direct wine shipping will hurt brick-and-mortar retail sales and cost jobs. 

Among the groups pushing to lift the restrictions in Delaware is Free the Grapes!, which describes itself as a "national grassroots coalition" of wine aficionados and wineries. 

"You should have the freedom to determine which wines you want to enjoy, and how to purchase them," the group posted on its website. "Consumers are driving changes in how products are bought and sold; they want and expect to be able to purchase wines they want in the manner of their choosing: online, by phone, (or) through periodic winery club shipments."