ANNAPOLIS – Attempts to reform craft beer regulations in Maryland fizzled in a committee meeting last week, despite local efforts to support the legislation.
Last Friday, the Economic Matters Committee voted down House Bill 518, which, among other things, would remove certain limits on craft beer production, taproom sales and take-home sales and repeal buy-back provisions that require brewers to purchase their beer from distributors if they exceed the 2,000-barrel limit on taproom sales.
Last year, Comptroller Peter Franchot formed a “Reform on Tap” task force in response to the 2017 passage of House Bill 1283, which imposes certain restrictions on breweries with a Class 5 brewery license. As a result of that task force, Franchot introduced the Reform on Tap Act of 2018, or House Bill 518.
In a February hearing on House Bill 518, Deputy Comptroller Len Foxwell told the committee the bill would provide better economic conditions for craft brewers.
“The intent from the start to the finish was to come up with an action plan … in which the craft brewing industry would have a better framework to compete, grow and succeed,” he said.
Shore Craft Beer founder Ann Hillyer, who testified in favor of House Bill 518 at the February hearing, said such legislation would have benefitted both breweries and distributors in the form of tourism and economic development.
“It’s an issue people don’t think about, and they don’t understand the impact it will have on them,” she said.
Hillyer said regulations imposed on craft breweries limit the economic impact the breweries could have on the state of Maryland. According to the National Brewers Association, Maryland ranked 47th in economic impact, 36th in the number of breweries and 25th in gallons produced per adult age 21 and over.
“Right now there is a lot of pressure to keep things status quo,” she said, “and it’s devastating for Maryland.”
Opponents of the bill, however, argue that Franchot’s task force failed to give distributors, retailers and public health officials equal representation.
In the February hearing on House Bill 518, committee member Ben Kramer (D-19) argued the task force never included public health officials or victims of drunk driving accidents.
Committee member C.T. Wilson (D-28) agreed the bill posed a public safety issue. He added Franchot’s
“Reform on Tap” initiative contradicted his role as a regulator of alcohol.
“There is no ill will here when we are asking about health and the affects on health because this is alcohol,” he said.
Last week, the Economic Matters Committee ultimately voted 17-4 in opposition to House Bill 518.
In an interview this week, Rob Burke, president of Eastern Shore Distributing, said he was happy the committee voted against House Bill 518.
“To me, it’s a vote for small business,” he said. “There was this message out there that wholesalers were these huge conglomerates and that couldn’t be further from the truth. If they had passed this bill it would have been devastating to us as a small business.”
Burke said he was eager to see brewers, wholesalers, public health officials and legislators at the table moving forward.
“The craft industry is thriving in Maryland and we’re really happy about that,” he said. “If not, let’s put together some common-sense approach and get everyone involved.”
Despite the committee’s decision, Hillyer said public support remained high. She said Franchot’s petition drive to garner support for craft beer legislation collected more than 9,000 signatures.
“There is a huge amount of support, but we didn’t influence the legislators enough,” she said.
Locally, Shore Craft Beer created its own petition to support Franchot’s efforts and bolster craft beer-related tourism on the Eastern Shore. The petition, however, received few signatures.
“I don’t think this should be a fight between the breweries and the distributors,” she said. “It’s about tourism, it’s about economic impact, it’s about jobs and it’s about young people. It’s a big-deal bill and it’s a huge tourism generator. We are going to keep saying this is important to our area. We are not going to stop to make our area a top-10 craft beer destination.”
In a statement released last Friday, Franchot criticized the committee’s decision.
“It was more business as usual in Annapolis — the corporate beer lobbyists did their job and got their money’s worth,” he said. “Meanwhile, our independent craft brewers — who are creating thousands of local jobs, strengthening local economies and rebuilding local communities across Maryland — have once again received the message that our state’s leaders are fundamentally hostile to their chosen line of work. Aside from the lobbyists who did what they’re hired to do, today’s big winner is the Commonwealth of Virginia, who will most assuredly use this display by the legislature to recruit our brewers to cross state lines … Rest assured that this is merely the beginning of the fight to save Maryland’s amazing craft beer industry.”
