Good Beer Hunting

Wild Week of Legislation Highlights Ongoing Battles Over Beer Laws

 photo by Kyle Kastranec

photo by Kyle Kastranec

This week, Maryland legislators are preparing to vote on a rollback of brewer-friendly legislation, a shift of tone and expectation that highlights longstanding concerns about the state’s commitment to a healthier beer industry.

Last year was an awkward one for the state, as it struggled with laws that initially favored Guinness—who is opening a new destination brewpub in the state—with a carve-out that favored own-premise retail business over other craft brewers. Since then, a more broadly beneficial bill was put in place, providing a boon to the state’s beer tourism and own-premise business among all brewers.

After going back and forth on a variety of topics before settling on a set of enhancements that allowed breweries, among other things, to:

  • Provide up to 18 ounces of samples during tours or events

  • Sell beer to-go if a customer had taken a tour or attended an event

  • Sell beer contract brewed on its behalf elsewhere

[Disclosure: Guinness underwrites Good Beer Hunting’s Coming to America series.]

Most importantly, it increased the amount of beer a business could sell on-premise from 500 to 2,000 barrels, providing a significant revenue stream. While profits vary business-to-business and even beer-to-beer, selling a keg versus going through distribution generally provides at least four or five times profit.

A proposal under a new House bill would more or less revert the most important parts of last year’s legislation, including how much beer a brewery could sell at their own taproom, as well as eliminating contract brewing allowances.

The updates benefit Guinness’ plans to build its U.S. hub in Maryland, but serves as a strange bait-and-switch for the rest of the industry it serves, having gained support from the state’s craft beer community. Now, the state government is looking to essentially throw that goodwill—and the economic windfall that would come of it—out the window.

This new bill is backed, unsurprisingly, by wholesalers and retailers who feel the existing legislation is competitive with their role in the traditional three-tier system. In response to the proposal, Comptroller Peter Franchot’s offered a scathing review on his Facebook page, noting that the new proposal would “send the message, once and for all, that our state's government is hostile to our current and future craft brewers, and indifferent to the jobs, economic growth and neighborhood reinvestment they provide.”

Despite singularly benefiting from this new bill, Guinness vehemently disapproves of the legislation that rolls back these benefits from all brewers, issuing a statement that the company was surprised the changes would even come up and that the bill would take the state backwards in growth of its beer industry, tourism, jobs and all the economic benefits that would follow. Arguments on the laws will be heard this Friday, Feb. 23.

“While we are focused on getting our brewery completed and open to the public this summer, Guinness is committed to being a part of Maryland’s vibrant beer industry,” the statement read, attributed to Dwayne A. Kratt, the government affairs director for parent company Diageo.

There’s so much more to the seemingly never-ending issues in Maryland, and if you’re a resident of the (ironically nicknamed) Free State, here and here are good places to start to learn more. (You can also see past GBH coverage here, here, here and here.) What gives this ongoing issue particular weight is the timing of disagreements in relation to the progress seen elsewhere around the country.

"As a Marylander and someone who covers the politics around Maryland beer, it's tough to watch so many other states champion their brewers in a way we do not yet seem capable," says Liz Murphy, a columnist with Annapolis' Capital Gazette who's covered the state's shifting beer laws and also served on its Reform on Tap Task Force. She continues:

"It's somewhat ironic, considering we typically have a reputation for being fiercely proud of anything Maryland born and bred. For the moment, Maryland brewers would seem to be the exception to that rule for some of the legislators sitting in the Maryland General Assembly. But we have an opportunity to change that."

In the same week that the legislative issues in Maryland came to light, New York proudly showcased eclipsing the 400-brewery mark, the highest number of such businesses ever in the state, breaking the pre-Prohibition record of 393, set more than 140 years ago. This success is directly tied to a 2012 law change that created a "Farm Brewery" license modeled after the state's 1976 Farm Winery Act, which helped triple the number of those businesses in New York through today. The same took place for beer in just a half-decade. Growth of those businesses has directly benefited in-state agriculture, with acreages of hops doubling between 2014 and 2016 and malting barley growing by nearly four times over. The impact for the Finger Lakes region, in particular, has been huge.

Similarly in Ohio, state representatives last week introduced the “Ohio Proud Craft Beer Act,” which is meant to provide an official certification to beer and cider made with Buckeye State ingredients as well as allow breweries to sell one-ounce samples and packaged beer to-go.

While separate situations, what makes the Ohio legislation contrast so starkly to what’s going on in Maryland is the effort its main sponsors went through to gain support across the state. Republican Steve Hambley and Democrat Martin Sweeney toured Ohio with their colleagues to have direct interaction with industry pros, from maltsters to brewers.

"This legislation not only supports Ohio barley growers, hop and fruit farmers, maltsters and craft brewers, but also consumers who want to know that what they are drinking was grown right here in the Buckeye State," Hambley said in a statement.

But perhaps the biggest grain of salt fit to rub in Maryland’s self-inflicted wound is from Wisconsin, where a controversial vote was canceled in which state senators would have decided whether or not to create an Office of Alcohol Beverage Enforcement meant to create rules and hire staff to “enforce” the state’s three-tier system. The bill’s sponsoring senator decided not to move forward with his proposal after pushback from alcohol-focused businesses, from distillers all the way to MillerCoors.

“Small, craft beverage producers are one of the fastest growing, most vibrant sectors of Wisconsin’s manufacturing economy. I don’t understand how anyone claiming to be pro-small business or pro-job growth could possibly support legislation like this," Brian Sammons, president of the Wisconsin Distillers Guild, told the Milwaukee Journal-Sentinel.

As seen in recent years across the country, alcohol-related law is in a near-constant state of flux, as states wrestle with the cross section of antiquated Prohibition laws and economic opportunity. To beer enthusiasts, the answer in these legislative debates is simple: unleash the potential of beloved breweries and see what happens. For a host of reasons, representatives aren’t so easily swayed.

With beer lovers’ eyes turning toward the latest round of drama in Maryland, attention may also soon turn toward neighboring Virginia. On Feb. 15, the state's House and Senate passed "at rest" provisions in a state that currently allows self-distribution. According to that law, it would create a situation in which wine or beer must be delivered to a wholesaler and sit for at least four hours before moving on to its final retail destination. What that means for the state’s beer makers remains to be seen, but it’ll no doubt be the latest in what’s becoming an ongoing source of political drama.

—Bryan Roth