Maryland’s chief alcohol regulator released a comprehensive legislative package on Monday that aims to eliminate myriad operational limits currently imposed on the state’s brewers.
As written, the Reform On Tap Act of 2018 would, among other things, abolish limits on taproom and take-home sales, dramatically lift the self-distribution cap, and do away with the buy-back law, the controversial provision passed just last year that requires brewers selling a certain amount of beer on-premise to purchase their own product from a wholesaler at a marked up price.
The reform package comes two weeks after Comptroller Peter Franchot released a detailed examination of the state’s legislative climate, which concluded, unambiguously, that Maryland’s craft beer industry would “never fulfill its true growth potential” until the “laws are fundamentally changed.” The report itself stopped short of proposing actual policy, however, and served primarily as a response to last year’s passage of what amounted to a tepid compromise bill that granted brewers some new leeway, but ultimately served to uphold the burdensome regulations they had been fighting to tear down. Now, though, Franchot, after months of receiving feedback from industry stakeholders, has unveiled his own vision for the future with tangible changes.
“We simply cannot ignore the fact that our laws and regulatory framework have stood in the way of the limitless potential of Maryland's craft beer industry. This is going to take us from last in the region, to the first in the nation,” says Franchot. “Craft breweries are innovative businesses, and each has a measureable impact on our economy and in their local communities. They attract local residents and tourists alike who appreciate locally-sourced ingredients, environmentally sustainable practices and each taproom's distinct style.”
Elsewhere in the package, Franchot proposes that brewers producing less than 300,000 barrels annually should no longer be bound by franchise law, but by private contract, that contract brewing should be permitted without restriction, and that local governments, not the state, should be responsible for mandating operational hours.
In all, the initiative seeks to make 12 changes – referred to, of course, as a “12-pack” – to the regulatory system in an explicit attempt to make brewing in Maryland less of a hassle. Speaking Monday in the building slated to host his company’s latest expansion project, Adam Benesch, co-founder of Union Craft Brewing, explained the importance of such efforts.
“There is significant room for improvement here,” he says. “We need to create an environment that encourages both future and current Maryland breweries to make the investments needed to achieve this potential; an environment that allows for greater production and sale of Maryland beer that will ultimately benefit Maryland brewers, distributors, and retailers.”
Despite his assertion that such changes would benefit the industry at large, the reform package will likely be met with opposition from the other two tiers of the industry. Jack Milani, an area pub owner and legislative co-chair of the Maryland State Beverage Association, for instance, told the Baltimore Sun he has reservations.
“Our concern,” he says, “is to make sure any legislation that’s looked at takes into consideration there are a lot of family-owned businesses that are retailers, and anything that’s proposed is fair to everyone.”
A lobbyist for the state’s wholesalers, meanwhile, has previously warned that brewers are trying to “eviscerate” the three-tier system, writing, “consumption at a brewery should be in amounts limited to marketing the product to brewery visitors, and not in amounts that turn a brewer/manufacturer into a bar.”
Either way, after taking what amounted to a half step to placate all sides, Maryland is now making moves toward flipping the system on its head entirely.
The Sun reports Franchot’s office has asked Gov. Larry Hogan to submit his proposal as part of a department bill.
- Dave Eisenberg
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Reform On Tap Act of 2018 [Peter Franchot]