Beer reform taps out as Maryland House panel rejects Franchot brewery bill

The hopes of Maryland’s craft brewers for sweeping changes to the state’s beer laws flattened Friday like an open beer left out too long as a legislative committee rejected Comptroller Peter Franchot’s “Reform on Tap” initiative.

Unhappy with Franchot’s bold venture into policymaking, a House committee voted 17-4 against a bill the Democratic comptroller had been pushing for months as the best way to fix what he viewed as flawed beer regulations approved last year by the General Assembly.

The panel then compounded the repudiation by passing a measure seeking to examine whether the comptroller’s office should retain its role as the state’s alcohol regulator.

Franchot’s proposal sought to lift various restrictions on Maryland’s brewers, including curbs on the amount of beer they can make and sell directly to the public. While the limits rankled the state’s burgeoning craft brewing industry, other sectors of the alcoholic beverage industry defended the regulations.

Franchot issued a statement calling the rejection of Reform on Tap “more business as usual in Annapolis.”

“The corporate beer lobbyists did their job and got their money’s worth,” he said. “Our independent craft brewers ... have once again received the message that our state’s leaders are fundamentally hostile to their line of work.”

Franchot said Virginia would be “the big winner” because of the committee’s decision, predicting it would lure Maryland brewers across state lines with more favorable rules. He vowed to continue the fight in this year’s elections and next year’s legislative session.

Throughout the push, Franchot portrayed himself as the champion of the little guy against entrenched liquor interests and their General Assembly allies. Franchot’s initiative won praise from his frequent ally, Gov. Larry Hogan, but the Republican chief executive stopped short of adopting it as his own.

While Franchot’s campaign won him praise from some brewers, it did not play well with lawmakers of either party who say the comptroller not only excluded them from policymaking but insulted them along the way. The tension culminated in an hours-long, rancorous February hearing that Franchot advertised as “The Fight for Maryland Beer.”

Democrats and Republicans on the House panel were united in rejecting his recommendations.

Del. Dereck Davis, chairman of the committee, decried the acrimonious tone of the debate over the bill. “It’s been sort of like an us-against-them kind of thing,” the Prince George’s County Democrat said.

The panel also rejected a bill that would have rolled back gains the brewing industry made in legislation last year after its sponsor, Democratic Del. Talmadge Branch of Baltimore, withdrew it. Lawmakers privately conceded that the bill, which Franchot said was a threat to the craft brewing industry, was intended more as a message than a serious proposal.

Davis said he hopes that after the June 26 primary he can sit down with craft brewers and discuss other proposals to allow more modest deregulation of the industry.

The committee further showed its displeasure with Franchot by unanimously approving a bill that would set up a task force to study whether the comptroller’s office should continue as the state’s regulator of the alcoholic beverage industry. Its sponsor, Democratic Del. Benjamin F. Kramer of Montgomery County, said Franchot had ignored public health concerns in his zeal for beer industry expansion.

If approved by the full House, the bill would go to the Senate.

Deputy Comptroller Len Foxwell described that measure as a “joke” and a “colossal waste of time.”

Brewers lamented the demise of the Reform on Tap bill.

Stephen Demzcuk, founder of the Baltimore beer company RavenBeer, called its failure “very disappointing.”

“It simply makes no sense not to support such a popular business model that all of our neighboring states have openly embraced, and are experiencing the rewards in having done so,” Demzcuk said. “The public truly wants a change in Maryland’s beer laws.”

Demzcuk said he suspected pressure from wholesalers and alcohol retailers, opponents of Franchot’s bill, led to the decision.

“Many people are afraid of change,” he said. “We think a rising tide will lift all boats. They’re thinking the other way around, and it’s unfortunate.”

The decision was “neither surprising nor unexpected,” said Kevin Atticks, executive director of the Brewers Association of Maryland. “Our goal is to get to transformative change, one way or another,” Atticks said. “This is something we’re committed to.”

Eric Best, general manager of the Bob Hall LLC beer distributor in Charles County, welcomed the vote.

“This bill would have had devastating consequences for many family-owned small businesses that have been in Maryland for generations,” said Best, vice president of the Maryland Beer Wholesalers Association. “We’re glad to keep working with brewers to sell more Maryland beer in what’s been a historic year for craft beer expansion in the Maryland brewing industry.”

Franchot launched his “Reform on Tap” initiative last spring after the legislature approved a bill lifting some restrictions on brewers’ direct sales of beer through their taprooms.

The legislation, spurred by the Guinness brewery’s ambition of opening a tourism-oriented plant in Baltimore County, was a compromise among various industry sectors. But some craft brewers complained it did not go far enough in freeing them from restrictions.

In response, Franchot created a task force he charged with developing recommendations for what he called reforms of the state laws governing how breweries can operate. In an unusual move for a comptroller, he did so on his own — without seeking the input of the General Assembly leadership.

The comptroller included members of various sectors of the alcoholic beverages industry on the panel, including wholesalers, retailers, tavern owners and restaurant owners. But its membership was heavily skewed toward brewers and their allies.

The Reform on Tap task force held hearings across the state last summer and fall, earning news coverage. But the panel never voted on making recommendations to the legislature. Instead, the comptroller’s office wrote its report and drafted the legislation.

Del. Luke Clippinger was one of the four lawmakers, all Democrats, who supported Reform on Tap. But the Baltimore lawmaker also supported the bill to examine whether the comptroller still should regulate alcohol.

Clippinger said Franchot’s advocacy did not help the brewers.

“He has left brewers in the lurch, and he has left people who would like to support brewers in the lurch,” Clippinger said. “The comptroller has screwed this up for them in the worst possible way.”

Foxwell called that “an excuse that just doesn’t hold water.”

Clarification: An earlier version of this article Aincluded a paraphrase from RavenBeer founder Stephen Demzcuk regarding opponents of Franchot's bill. The article has been changed to clarify that Demzcuk intended to say he suspected pressure from wholesalers and alcohol retailers, not restaurant associations, led to the bill's death.

mdresser@baltsun.com

twitter.com/michaeltdresser

Copyright © 2018, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad
75°