Maryland Looks in the Mirror, Doesn’t Like What it Sees

Austin Ray
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THE GIST
Earlier this year, Maryland’s chief alcohol industry regulator formed a task force intent on evaluating the legal framework that governs the state’s beer industry. Its findings, as released this week report that, holy shit, the laws are very, very bad. Or, as put in the 41-page report prepared by Comptroller Peter Franchot, the state’s “craft beer industry will never fulfill its true growth potential until Maryland’s craft beer laws are fundamentally changed."

In essence, the report advocates for a more lenient three-tier system while stopping short of proposing actual policy to alleviate the wide array of burdens the report details. No less, the state-commissioned findings should serve as cannon fodder for brewers as they look to draft new legislation in the future.

WHY IT MATTERS
The report—dubbed “Maryland Craft Beer: A World Without Limits”—comes on the heels of the state’s recent passage of a so-called “compromise” bill to give brewers more freedom without scaring distributors too much. Without recapping specifics, the bill basically loosened some restrictions imposed on brewers but ultimately served to uphold the status quo. And now, in response, the state itself has affirmed that the status quo itself is directly, unambiguously, and obviously responsible for stifling the state’s burgeoning beer industry.

As the report goes, the laws in place have, among other things:

  • “restrained the natural growth of the Maryland craft beer industry and relegated the state to a subordinate competitive position within our immediate region,”

  • “inflicted damage upon Maryland’s business reputation at a time when the state has been trying to change the perception that this is not a welcoming environment for investment and job creation,”

  • and “fostered public disillusionment with our state’s legislative and political process.”

More than that, though, the document provides an illuminating look at the tangible impacts Maryland’s laws have had on the industry both in and outside the state.

For starters, it acknowledges that the laws in place “derailed” Flying Dog’s plans to build a massive new brewery, a project the company says it put on permanent hold specifically because of the regulatory climate in Maryland.

Furthermore, it includes an eye-opening anecdote about how neighboring Virginia sought to capitalize on the growing turmoil in Maryland:

“Virginia’s recruitment activities have been corroborated by Kevin Atticks, Executive Director of the Brewers Association of Maryland, who stated, in his October 25 presentation to the Task Force, that ‘brewers have reported receiving calls from top Virginia officials – including from Governor [Terry] McAuliffe and Commerce Secretary Haymore – stating why they should (re)locate in Virginia.’ According to Mr. Atticks, Virginia’s pitch to Maryland brewers included citing a number of procraft (sic) beer provisions in the Commonwealth’s beer laws.”

The whole report—which is presented as a uniquely thorough and honest self-examination—is well worth a read, as it highlights myriad industry-wide disparities relating to production limits, self-distribution, franchise laws, and more. Additionally, it does an impressive job clarifying what the industry has meant to tourism, manufacturing, and the state’s economy.

But perhaps the biggest takeaway is that, in this report, Maryland’s brewers have found a forceful ally in a position of real power. Of course, this has been true since at least March, when DC Beer got Comptroller Peter Franchot to verbally burn the whole system to the ground. Now, though, the state’s chief alcohol regulator isn’t just sounding off. With this report, he, and his task force, has gone ahead and armed brewers with hard proof of the system’s shortcomings. And it’s the type of proof that will be hard to ignore without consequence going forward.

—Dave Eisenberg