July 17, 2018
Politics & Opinion
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Reforming Maryland’s Dysfunctional Beer Industry

Peter Franchot
Peter Franchot's picture
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January 10, 2018

After witnessing the damaging effects of House Bill 1283’s passage in the 2017 legislative session, I convened a 40-member task force that held public, live-streamed meetings across our state. The goal of our “Reform on Tap” effort is simple: to remove statutory and regulatory impediments that have stood in the way of the craft beer industry’s limitless potential.

To this day, I have not found a single craft brewer who has found this legislation beneficial. Instead, it codified arbitrary limits on the production, sale and distribution of Maryland-made beer within our state’s borders.

In fact, the bill — which became law without Governor Hogan’s signature because he, too, had strong reservations about its provisions — stifled expansion plans for one of the state’s largest breweries, opened the door for Virginia to poach breweries away from Maryland and sent the message to prospective investors that our state was not brewer-friendly.

Over the course of several months, my task force — comprising brewers, distributors, retailers and consumers — performed a deep review of the state’s beer laws and identified challenges and opportunities that would allow the industry to thrive.

During that process, we received a report from the state’s Bureau of Revenue Estimates showing the craft beer industry contributed more than $800 million to the state’s economy and supported about 6,500 jobs in 2016.

What’s not to like?

The thing I love most about these breweries is how they’re not just beer factories. Many are the linchpin of revitalized and flourishing communities, and nearly all give back to local nonprofit organizations.

Take Jailbreak Brewing Company in North Laurel, which raised tens of thousands of dollars for Ellicott City flood victims. Union Craft Brewing in Baltimore holds a nonprofit night every week with a percentage of proceeds benefiting that organization.

In fact, Union has been so successful, they are moving to a much larger facility this year that will house their brewery operations and have space for other small manufacturers, including a coffee roaster, ice cream shop, hot sauce company and more.

Craft beer production, while growing steadily in Maryland, lagged behind the national growth rate. And we remain a net importer of craft beer, meaning that we consume more than we produce — so there is room for growth.

Make no mistake, this is not a zero-sum game. There doesn’t have to be winners and losers. If we do this right, breweries will be able to make more beer, distributors will be able to deliver more beer and retailers will be able to sell more beer. Everybody benefits.

With that in mind, I have proposed the Reform on Tap Act of 2018, which would bring Maryland’s beer laws into the 21st century, while giving these innovative manufacturers and job creators more opportunities to succeed.

Specifically, the bill would:

·         Remove all limits on beer production, taproom sales and take-home sales.

·         Repeal the “buy-back” provision that requires brewers to purchase their own beer back from distributors at a marked-up cost when they exceed the 2,000-barrel limit on taproom sales.

·         Lift unnecessary restrictions for take-home sales.

·         Let local jurisdictions determine taproom operating hours.

·         Allow smaller brewers to self-distribute.

·         Eliminate franchise law requirements.

·         Loosen restrictions on contract brewing that hurt start-up breweries.

But this effort won’t succeed on good feelings and commonsense proposals alone. We need your help.

Go to www.marylandtaxes.com and sign our petition in support of the Reform on Tap Act. Call your representatives and tell them to vote in favor of Maryland craft beer. And continue to support your favorite local brewer, tavern and liquor store.

I firmly believe that Maryland has an opportunity to become a leader in this industry if our legislators embrace these reforms.

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