Alcohol regulator Peter Franchot, lawmakers clash in heated hearing on beer regulations

Maryland Comptroller Peter Franchot took his case for fewer limits on the state’s craft brewers before a panel of lawmakers whose hearing room turned into a lion’s den Friday as delegates accused him of fomenting rancor over the issue.

Franchot had promoted the hearing on his Facebook page like a boxing match that he dubbed the “Fight for Maryland Beer” and had recently labeled lawmakers who were opposing him as idiots.

“I was hoping we could have a thoughtful, rational and respectful conversation,” said Del. Ben Kramer, a Montgomery County Democrat who has proposed a bill to study stripping Franchot’s office of its alcohol regulating authority. “But as I witness from your Facebook tirade, it’s just not possible to do that.”

Lammakers met Franchot’s promise of a fight by making the state’s official alcohol regulator — and unofficial head cheerleader for Maryland’s craft brewing industry — wait for more than four hours Friday afternoon before inviting him to testify. At 7 p.m. 71 witnesses were still scheduled to testify.

When he finally did appear shortly after 5 p.m., Franchot came with a challenging message to sell — that the same committee last year botched a bill that led to new regulations that he said failed craft brewers and favored the larger traditional alcohol companies. He described last year’s new regulations as a disastrous result of “back room deals” that did not give small, craft brewers room to grow and had made Maryland a “national laughing stock.”

He came selling his remedy: The Reform on Tap Act of 2018, legislation he crafted since last year’s session with the help of a task force heavily weighted toward the craft brewing industry.

“This bill creates a world without limits for our craft brewers,” he told the committee.

He also came with what he billed as two “peace offerings” — a cold beer after the hearing at an Annapolis brewpub and a demand that lawmakers pass his bill without amendments.

He did not find any immediate takers for either offer. Instead, panel members excoriated him for stepping outside his role as regulator, showing bias toward one segment of the alcoholic beverages industry and alienating the very people he was trying to persuade.

“Can’t we stop with this Facebook, Twitter, Tweeter stuff and work for the good of the people?” demanded an angry Del. C. T. Wilson, a Charles County Democrat.

The bill Franchot has proposed would remove a variety of limits on craft breweries. It would let them brew as much beer as they want and sell it through their taprooms or directly to retailers without limits. It would make it easier for them to get out of contracts with distributors. It would remove state restrictions on the hours they can serve beer in their taprooms.

But what seems like a dream come true for the state’s 84 brewers seems like a nightmare for Maryland’s liquor wholesalers and retailers, who have put their considerable political and lobbying clout behind its defeat.

Del. Dereck Davis, chairman of committee, set the tone early by hearing more than a dozen less prominent bills ahead of Franchot’s legislation.

Franchot had been sitting in the front row of the hearing room, ready to lead off at 1 p.m., when a state trooper announced the order in which bills would be heard.

The comptroller rose from his seat and warned supporters his bill would likely be heard last. He retreated to the hall outside to cool his heels, give interviews and chat with fans. His prediction was correct: He did not go on until 5:15 p.m.

Davis’ move was a breach of the norms in Annapolis, where state elected officials are typically afforded the courtesy of being allowed to testify first or early in the hearing lineup.

But many lawmakers have been accusing Franchot of trampling on traditional courtesies during the months-long journey to the hearing room.

For instance, the comptroller launched his Reform on Tap task force without consultation with the legislature’s presiding officers or the committee chairmen with jurisdiction over alcoholic beverages. He also described legislators who proposed bills he didn’t like, including members of the Economic Matters Committee, in disparaging terms.

There was no sign of partisan division on the committee as its Democrats and Republicans united to defend its handiwork on last year’s bill and to criticize the comptroller.

Del. Warren Miller of Howard County, one of the committee’s senior Republicans, said that when he joined the panel in 2003, the old three-tier system separating alcohol producers, distributors and retailers was intact. Miller told representatives of the craft brewing industry that it was the work of the House committee and it’s Senate counterpart that made it possible for the craft beer industry to grow.

“Nobody in this room says, ‘Hey, let’s put brewers out of business,’” he said.

Miller said he has received threats over the beer issue. He warned a lobbyist for the Brewers Association of Maryland that the rhetoric from some in the industry wasn’t helping their cause.

“If the tone and tenor doesn’t change, I suspect there will be a rough time,” Miller said. “You guys need to straighten up your act.”

Also on the hearing list was a bill introduced by Del. Talmadge Branch, a Baltimore Democrat, and Davis that would have repealed last year’s bill outright. Going into the hearing, Franchot denounced the bill as a mortal threat to the industry, though it appeared to have been introduced to make a point rather than actually pass.

Davis and other pressed beer industry representatives on why they wouldn’t support that bill if they disliked last year’s so much. Industry witnesses admitted under pressure that last year’s much-maligned bill, which increased the amount of beer they could sell out of their taprooms, was better than the beer industry climate was previously.

Industry representatives said, however, that Maryland’s beer laws need to improve more to allow Maryland brewers to compete with rivals in nearby states.

Nick Manis, executive director of the Maryland Beer Wholesalers Association, said he was upset with accusations hurled by Franchot’s task force last year. He said his association is also made up of family-owned businesses that have been in Maryland for generations and that Franchot’s attempt to portray the debate as being between “evil big business versus the lowly little guy … is not grounded in reality.”

The wholesalers generate $4.3 billion in direct economic impact in Maryland and distributors employ 1,900 jobs paying an average of over $62,000.

He said typically lawmakers and business owners meet prior to the General Assembly session to work out compromises with “dignity and respect.”

“But no longer,” Manis said. The debate, he added, has “crossed the line” into being “mean-spirited and personal.”

After multiple tense exchanges between Franchot and members of the committee, Davis called an abrupt halt to his testimony after a particularly vitriolic clash with Kramer.

Kramer, along with Miller, was a co-sponsor of the bill that would have created a task force to consider in effect firing the comptroller as chief alcohol regulator. Franchot recently described the proposal as idiotic.

Testifying for his bill, Kramer criticized Franchot for setting up a task force that would consider making alcoholic beverages more readily available while failing to include any advocates for public health or public safety on his task force.

Kramer responded by reciting the organizations who supported his bill as “the idiots from the Maryland Public Health Association,” the “idiots from MADD” and so on.

After the hearing, Branch said that in his 24 years in the House he had never seen a performance like Franchot’s Friday.

“He walked in there so cocky, like telling us don’t make any changes to his bill,” he said. “That’s crazy. You don’t do that to a committee.”

Sun reporter Doug Donovan contributed to this article.

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