A look at the bad beer bill passed by the Maryland House of Delegates

The Maryland House of Delegates unanimously passed a bill that some say will take the legs out from underneath the recently resurgent local brewing scene.

How did this happen? Let's break it down.

Currently, local breweries are only allowed to sell up to 500 barrels a year for on-site consumption. But when Guinness (owned by Diageo, who also counts national brands such as Smirnoff and Captain Morgan among their many assets) decided they wanted to set up shop in Relay, Maryland, bills to increase on-premises sales were entered into the discussion—probably because it was a stipulation in the deal bringing them to the state; Guinness expects to sell a lot more than 500 barrels on-site. Cool, Guinness is going to champion a bill that will further expand local breweries' abilities. Sounds good, right? Except that's not how it went down.

This eventually led to three bills. One (HB1391) would only allow the Guinness brewery to operate with increased on-site consumption of up to 5,000 barrels, i.e. create a special exemption for Diageo/Guiness. The second (HB1420) creates an entirely new, statewide class of brewery (class 10) that would allow everyone to serve more in their taproom (up to 4,000 barrels). The third bill (HB1283) increases on-site consumption to 2,000 barrels a year but decreases how late local breweries can remain open (some think that the liquor lobby is behind this bill) to 9 p.m. Sunday through Thursday and 10 p.m. Friday and Saturday. In Baltimore City, breweries can currently stay open until midnight.

By comparison, laws in Washington D.C. and Pennsylvania currently allow their breweries' taprooms to remain open until midnight seven days a week, and Virginia breweries aren't beholden to any restrictions other than the state's normal liquor laws.

Another provision HB1283 is that any beer contract brewed (like at Peabody Heights Brewery) would only be allowed to be consumed on the premises of the brewery it was brewed at. As a final kick in the teeth, the bill also repeals the original law that allows breweries to offer free samples to those who've taken a tour.

It should be noted that HB1420 (the win-win bill) had 50 co-sponsors compared to HB1283's 11. But somehow on Saturday, at the surprise of most brewers and beer lovers following along, the House unanimously passed bill HB1283. Responses from the Brewer's Association of Maryland (BAM) and local breweries were swift. In an official statement from the BAM, President Ben Savage said, "The bill proposes fundamental setbacks to our brewers' businesses, and was originally crafted without input by the Maryland beer community."

In the same statement, Union Craft Brewing co-owner Adam Benesch responded with: "Our brewery has become a popular destination for the community during the late afternoon and evenings, and this bill fundamentally changes the rules on us without our input. It will change our ability to have reasonable public hours at the brewery, which will cause us to potentially lay off 5-10 employees."

Peabody Heights Brewery owner Dick O'Keefe was equally unhappy, stating: "We invested over $3 million in this brewery, created 12 jobs, brought a world-renowned brewmaster to Baltimore and now produce beer for startup breweries throughout Maryland. The bill as drafted hurts us and closes the doors for our startup clients."

I spoke with John Marsh, co-founder of Waverly Brewing Company, who says: "This legislation really affects everyone in the brewing community—from our small brewery all of the way up to Heavy Seas. If it's not the taproom hour's limitation, it's the inability to contract brew (and sell if it from your taproom). I mean, we're talking about lost income, lost tax dollars, and, inevitably, lost jobs. It's a shame because, basically, it's hard enough to make a buck in this business as it is."

Yesterday, Comptroller Peter Franchot told Naptownpint.com that HB1283 is a "travesty."

In an article published by the Capital Gazette, Kevin Atticks, Executive Director of the Brewer's Association of Maryland, speculated this all has to do with retailers and wholesalers feeling threatened that local taprooms may dig into their sales. But, he says, those fears are unfounded when you look at the numbers.

"If you take all of the beer that all of our breweries sell for on-premises consumption—which is what this argument is about—and you overlay it on top of all the beer sold in Maryland, we're talking about maybe one-one hundredth of a percent of all beer sold in Maryland. Even if you doubled it, tripled it … if you went tenfold and let every brewery sell 5,000 barrels, we'd maybe crack a 10th of a percent," Atticks said.

The bill is set to go before the state senate on March 29 and the BAM is hoping two amendments will be added: one to restore the original operating hours for class 5 breweries and another to take out the serving restrictions on contract brewed beer.

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