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Bake nuts in a 325 degree oven until toasty looking, about 10-15 minutes.
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Remove from oven and rub in a dry towel to remove the skins. This is a messy job, but hazelnut skins can be very bitter, so I always remove them.
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Coarsely chop the nuts and set aside to cool.
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Beat together the butter and sugar until creamy.
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Add the eggs, merlot and vanilla, gently mix together.
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Add the flour, baking powder and salt, carefully mix together.
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Add the hazelnuts and mix. The dough will be very soft and moist.
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Divide the dough into two logs and pat out on a large parchment lined baking sheet. I flour my hands a bit to help with this. These will spread, so if your baking sheet isn't large, use two. The logs should be about 3/4 inch thick, and about 5 x 14 inches long.
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Bake in a 325 degree oven for about 25 minutes, or until the logs feel firm. Remove from oven and cool on a rack for 5 minutes.
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Gently cut the logs into 1/2" - 3/4 " slices, and spread the slices out on the baking sheets. A serrated knife might be best for this. Return to the oven for 20 - 25 minutes more, turning the cookies over halfway through the baking time. Remove from the oven when they feel firm in the middle.
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Cool on a rack.