Maryland brewery issues unresolved in final days of legislature's session

Maryland's brewers — and representatives for international liquor giant Diageo — pleaded with state senators Wednesday not to pass a bill that they say purports to help the beer industry but actually harms it.

Lawmakers in the General Assembly have been weighing whether to allow breweries to serve more beer to customers in their on-site taprooms, a change that Diageo calls vital to its plans to open a Guinness brewery and tourist destination in Baltimore County.

The state's brewers have sounded alarms since the House of Delegates passed a bill about two weeks ago that would allow breweries to sell more beer on site, but restrict operating hours for taprooms and prohibit breweries from selling beer not brewed entirely on the premises.

Kevin Atticks, director of the Brewers Association of Maryland, said the bill was "one step forward ... and two steps backward."

The debate over breweries and their taprooms emerged this year when Diageo announced plans to convert the old Calvert distillery in Relay into a destination brewery that would be the home for Guinness American Blonde Lager. Diageo also would brew test beers there.

For the project to make financial sense, Diageo asked lawmakers to raise the limit of on-site sales from 500 barrels per year — which equates to about 125,000 pints — to 5,000 barrels per year.

Five bills that would address taproom sales have circulated in the General Assembly this year, creating confusion. Some bills would have affected only Diageo's Guinness project, while others would affect all 30 companies that hold state brewery manufacturers' licenses.

Del. Dereck Davis, who heads the House committee that pushed forward the surviving bill, and Del. Talmadge Branch described the bill that emerged from the House as a compromise measure.

"We passed a bill that gave some and took some from everyone. I think everybody is a little unhappy, and that's usually a sign of a pretty good bill," said Branch, a Baltimore Democrat. "No one got everything they wanted."

The version of the bill that's still alive would allow breweries to sell up to 3,000 barrels of beer on site, though the final 1,000 barrels have to be sold to and then bought back from a distributor — a clear concession to such wholesalers.

Taprooms would be required to close at 9 p.m. on weeknights and 10 p.m. on weekends, and they could only serve beer "fermented and brewed entirely at the brewery."

Those restrictions would hinder Maryland's growing beer industry, brewers said Wednesday. They've encouraged beer-lovers to contact lawmakers and held a rally against the House bill at Key Brewing in Dundalk Tuesday night.

Carly Ogden, co-owner of Attaboy Beer in Frederick, said her brewery's business plan relies on selling beer in the taproom to drum up interest in the brews before distributing them to stores. She and her husband secured a bank loan and signed a 10-year lease based on the assumption the brewery could stay open late.

"Right underneath us, the playing field is changing," Ogden told members of a Senate committee. "This is a scary moment for us."

Comptroller Peter Franchot, who enforces the state's liquor laws, joined the call against passing the bill as it currently stands. If the bill passes as-is, he said, it would send a bad message to the beer industry.

"The message is being communicated from state to state, as we speak, that Maryland does not welcome, and does not appreciate, the craft brewing industry," said Franchot, a Democrat.

Both the Brewers Association of Maryland and Diageo have offered amendments to correct what they see as the flaws in the bill.

Diageo wants changes to allow the company to sell some beer from its associated breweries — essentially, they want to sell imported Guinness Draught, Smithwick's and Harp in the taproom. The company also wants permission to bring in a certain amount of unfinished beer that would be aged, fermented and perhaps tweaked with extra ingredients at the Relay facility. That would allow Diageo to produce a variation of Guinness Draught that is brewed in Ireland and finished in America.

Diageo had previously primarily promoted the project as featuring Guinness American Blonde.

"We have to serve Guinness at this brewery," said Dwayne Kratt, Diageo's senior director of government affairs. "It's like telling Walt Disney World, 'You can have all your tourist destinations, but not Mickey.'"

The Brewers Association of Maryland is asking that the more restrictive hours apply only to new breweries, and also to allow breweries to sell a certain amount of beer on site that is brewed off site.

It's not clear how the Senate will handle the brewery issue. Several members of the Senate's Education, Health and Environmental Affairs Committee, which held Wednesday's hearing, seemed sympathetic to the concerns of the brewers and Diageo.

But the committee's chairwoman, Sen. Joan Carter Conway, nodded in agreement with the bill sponsors during their testimony. She later left and was not present for most of the hearing.

If the Senate passes a different version of the bill than the House approved, the differences would have to be worked out by the end of session on April 10.

Republican Gov. Larry Hogan has expressed support for Maryland's breweries. After the House bill passed, he wrote on Facebook that it "turns back the clock on the incredible growth of Maryland's craft brewing industry."

Baltimore Sun reporter Erin Cox contributed to this article.

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