Maryland Passes Tepid Compromise Bill

Austin Ray

THE GIST
Following successful negotiations between the state’s breweries, distributors, and retailers, Maryland lawmakers have passed a “compromise bill” to loosen restrictions on brewery taproom sales.

Pending Gov. Larry Hogan’s signature, the legislation would enable breweries to sell up to 2,000 barrels per year for on-premise consumption, up from the current limit of 500 BBLs. Affected breweries would also be permitted to sell an additional 1,000 BBLs, but to do so must get permission from the state and then, believe it or not, buy their own beer back from a distributor. Furthermore, the bill would extend operating hours for existing breweries, but force new breweries with taprooms to close at 10 p.m.

With the General Assembly set to close Monday night, the bill, passed Saturday, ultimately clears the way for Diageo to build a destination Guinness brewery in Baltimore County. The company had previously been concerned regulatory restrictions would render the project financially untenable.

WHY IT MATTERS
The Old Line State's beer industry is celebrating the bill’s passage, as brewers have been fighting to raise the sales cap for some time now. Speaking with the Baltimore Sun, Kevin Atticks, director of the Brewers Association of Maryland, called the final version of the bill “an incredible improvement” over an earlier draft. Diageo, meanwhile, issued a statement saying, “we truly believe this legislation is a positive step forward for Maryland’s hospitality industry.”

But it’s not a total win for beer manufacturers. In fact, even with the leash loosened quite considerably, the “compromise” is a far cry from what brewers had previously asked for—an ask that was itself a far cry from what’s allowed throughout most of the country.

As we reported at the end of last month, this idea of "compromise" drew the ire of the state’s chief alcohol regulator, Comptroller Peter Franchot, who sounded off to DC Beer. At the time, he slammed the notion that breweries compete with bars and called the distributor buy-back provision “nothing but crony capitalism.”

“This is why citizens are so angry at Annapolis,” he said. “Some well-connected interests can just come in and get what they want.”

The bill that ultimately passed was a different version than the one he publicly panned, but it still legitimizes his most pointed rebukes. Furthermore, despite calling it “an incredible improvement,” the Brewers Association of Maryland wrote Friday that it was supporting the bill only “reluctantly.”

“This process of negotiations – to address the prospect of major restrictions being thrust upon the industry – has been a gut-wrenching experience for members who simply wanted to follow their entrepreneurial dream of opening a craft brewery in Maryland,” the organization wrote. “Despite these improvements, there is much more to be done to transform Maryland law to support local craft brewers.”

The group went on to ask the public to continue following the issue before saying it would, for its part, “develop new proposals to move the industry forward in future legislative sessions.” And you can expect distributors and retailers to continue providing pushback at each turn. The fight in Maryland seems far from over.

—Dave Eisenberg

READ MORE
Deal would allow Guinness to open in Baltimore County, let breweries sell more in taprooms [Baltimore Sun]
Statement on HB 1283 [Maryland Beer]