Comptroller Franchot Unveils Legislation Aimed at Reforming Maryland’s Dysfunctional Beer Laws
Reform On Tap Act of 2018 seeks to dismantle statutory hurdles to craft beer’s growth
BALTIMORE, Md. (November 20, 2017)
Citing the significant economic, fiscal and community contributions of Maryland’s craft brewers and the industry’s immense potential, Comptroller Peter Franchot today announced a major legislative package that would fundamentally reform the antiquated laws and burdensome regulations that govern Maryland craft breweries.
The Reform on Tap Act of 2018 proposes the following:
- Removes all limits on beer production, taproom sales and take-home sales.
- Repeals the “buy-back” provision that requires brewers to purchase their beer from distributors at a marked-up cost if they exceed the 2,000-barrel limit on taproom sales.
- Lifts unnecessary restrictions for take-home sales.
- Guarantees the issuance of Class B or D beer licenses to microbreweries upon request.
- Lets local jurisdictions set guidelines for taproom operating hours.
- Allows smaller brewers to self-distribute.
- Eliminates franchise law requirements.
- Removes restrictions on contract brewing that inhibits start-up businesses.
“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,” said Comptroller Franchot, the state’s chief alcohol regulator. “Craft breweries are innovative businesses, and each has a measurable 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.”
The legislation reflects the findings of the Comptroller’s Reform on Tap Task Force, which held eight meetings during this summer and fall to get a better grasp of the state’s current laws and the challenges and opportunities that lie ahead for craft brewers. The 40-member task force represented every region in the state and industry stakeholders including brewers, distributors, retailers, consumers and lawmakers from both parties.
“Comptroller Franchot’s legislation would provide the framework needed for Maryland’s craft beer industry to thrive” said Adam Benesch, co-founder of Union Craft Brewing in Baltimore. “Maryland brewers, distributors and retailers all stand to benefit from the continued growth and success of our industry.”
“In an extremely competitive marketplace, Maryland craft beer is an essential component to our success,” said Joe Petro, owner of Hair O’ The Dog Wine and Spirits in Easton. “Every day, customers visit my store simply because they’ve tried a new Maryland craft beer at a taproom and now want to purchase a six-pack.”
When compared to neighboring states and the District of Columbia, Maryland is home to the most restrictive laws on production, distribution and taproom sales of craft beer.
The obstacles in current Maryland law were illuminated with the passage of House Bill 1283 during the 2017 General Assembly session. Since its passage, the consequences of the bill and the state’s anti-craft beer laws have become glaringly evident. For example, Virginia has aggressively recruited Maryland brewers to relocate to the Commonwealth, and Flying Dog Brewery recently decided to cancel its plans for a $54 million expansion in Frederick, resulting in lost jobs and economic activity.
The legislation announced today corrects the harmful provisions included in House Bill 1283 and would bring the state’s beer laws into the 21st century.
“Put simply, this legislation benefits consumers. It answers their call for change and for greater choices,” said Liz Murphy, a consumer advocate who writes the Naptown Pint blog. “Moreover, data has shown that Maryland-made beer keeps dollars in our communities and that Maryland craft breweries revitalize neighborhoods, create jobs and bring people together.”
An economic impact study conducted by the Bureau of Revenue Estimates found that in Maryland, the craft beer industry had an overall economic impact of $802.7 million and supported or created 6,541 jobs in 2016. The industry contributed nearly $110 million in local, state and federal revenues, which directly supports investments in education, public safety, transportation and the environment.
Still, the state is a net importer of craft beer, meaning it consumes more (275,000 barrels) than it produces (247,000 barrels). Furthermore, the National Brewers Association ranked Maryland 47th in economic impact, 36th in number of breweries and 25th in gallons produced per adult aged 21 years and over – all indications that the state’s craft beer industry has plenty of room to grow if the arbitrary restrictions currently in place are lifted.
“I’m looking forward to working with our local distributors, retailers and fellow brewers in the upcoming legislative session to pass a bill that grows the Maryland beer industry overall,” said Julie Verratti, co-founder of Denizens Brewing Company in Silver Spring. “The work of the Reform on Tap Task Force has created an opportunity to move our state forward, grow jobs and increase economic opportunity for multiple sectors. I, for one, am proud of that.”