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Md. beer bill gets skunked

It's not often we find ourselves saying this, but we agree with Comptroller Peter Franchot. He's absolutely right that the simplest, most effective way to ensure the major investment Guinness owner Diageo wants to make in a new brewery/taproom/tourist destination in Baltimore County and to foster the development of our home-grown brewing industry is to simply add a zero to the end of Maryland's current limit on the number of barrels of beer that brewers can sell on site and make it 5,000 rather than 500.

But things are never simple when it comes to Maryland liquor laws. Too many special interests are involved. To wit: Legislation that passed the House of Delegates would give Diageo and the Maryland Brewers Association a 2,000 barrel limit for taproom sales — and an extra 1,000 barrels if they sell them to a wholesaler first. That means a brewer would have to make the beer, put it in kegs, put the kegs on a truck, drive them to a wholesale warehouse, unload them from the truck, re-load them, drive them back and unload them in the taproom. This protects Maryland's consumers how? If the wholesalers are looking for a payoff, couldn't the brewers just write a check?

Sadly, that absurdity isn't really the problem with House Bill 1283. Rather, it contains two provisions that could jeopardize the Guinness project and harm the state's existing brewing industry.

The biggest issue is contained in an amendment to the House bill that prohibits breweries with what's known as a class five license from selling beer in a taproom or retail operation on site unless it is brewed and fermented entirely on the premises. That eliminates a practice known as "contract brewing" in which one brewery might enter into an agreement to have its beer produced at another brewer's facility — a circumstance that happens frequently when a brewer lacks capacity to keep up with sales or the specialized equipment needed to produce a particular style of beer. Proponents of the amendment argue that the letter of the law as it presently exists prohibits contract brewing, but the comptroller's office has never interpreted it that way, and the practice has been common since the beginning of Maryland's brewing industry. It particularly helps new entrants because they don't need to take the risk of buying large amounts of equipment up-front.

But worse, the new language in the bill effectively kills the Guinness project. Diageo had never intended to brew Guinness' marquee product — stout — in Maryland; it is made only in Dublin. But it did, of course intend to serve stout in its taproom. With all due respect, who's going to make a pilgrimage to Relay to sample a Guinness Blonde? The plan was to import unfinished stout that would be barrel aged, fermented and kegged or bottled here. That would have been legal under existing law but not under House Bill 1283.

The other problem is a change to the hours when brewers' taprooms can operate. Currently, that's regulated by county liquor boards, as such matters are generally for liquor license holders. But House Bill 1283 requires that taprooms close at 9 p.m. on Sundays through Thursdays and 10 p.m. on Fridays and Saturdays. Currently, depending on the county, some are allowed to stay open until midnight on weekends and even in a few cases until 2 a.m. That change will hurt businesses that have made investments based on their current license conditions. Some have suggested grandfathering in existing license holders or those in the process of applying for them, but setting up more restrictive rules for new entrants would stifle the growth of the industry and would further complicate the state's already convoluted liquor laws.

The reason hours of operation were on the table in the first place was as part of negotiations between brewers and the retailers who would have preferred no changes at all to the rules — and who have historically had an outsized influence in the General Assembly. They don't want taprooms to act as de facto bars, and hence become competition, but that wasn't a realistic fear anyway. Who would go to all the expense and trouble of setting up a brewery just to compete with a bar — which has a natural advantage anyway in being able to sell more than one brand of beer, not to mention wine and liquor?

Backers of the legislation say it's a good compromise because all sides had to give up something. But why should anyone have to? We suspect there is a widespread consensus in the public and the General Assembly that Maryland should encourage the local brewing industry and do what's necessary to advance the Guinness project. We urge the Senate to amend the House bill so it does that and no more.

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