Comptroller Franchot seeks to lift cap on craft beer production and sales – Baltimore Sun

Maryland Comptroller Peter Franchot on Monday unveiled a legislative package that would make sweeping changes to the state’s craft brewery regulations.

Franchot’s 12-point “tap law reform of 2018” would eliminate limits on sales at drinking places and on home consumption for breweries in the state. It would also eliminate limits on beer production for breweries that faced caps and let localities set dining hours.

The proposal seeks to eliminate regulations that Franchot said have stifled one of the state’s most promising economic engines.

“Despite the impressive growth and performance of our craft brewing industry, we simply cannot ignore the fact that our laws and regulatory framework have stood in the way of its unlimited potential,” Franchot said.

The proposal would follow legislation approved earlier this year which quadrupled the amount of beer breweries can serve – up to 2,000 barrels, or nearly 500,000 pints. The legislation, designed to pave the way for a new Guinness brewery and tasting room in Baltimore County, also stipulated that breweries could dispense an additional 1,000 barrels if they sold the beer to a wholesaler and then bought it back, and limited opening hours for new tasting rooms. .

The micro-breweries attached to the restaurants can serve up to 4,000 barrels on site.

Franchot’s proposal could prepare lawmakers for another lengthy brewery debate for a second year in a row.

Of the. Derek Davis, who chaired hours of debate on breweries during the last General Assembly session as chairman of the Economic Affairs Committee, which oversees liquor issues, said he was not sure the state needs additional changes to its brewery regulations.

“I’m trying to figure out what problem we’re trying to fix,” he said.

Still, the Prince George’s County Democrat said he was open to hearing from advocates.

“We want to make Maryland as business-friendly as possible,” Davis said. “If we can improve something, we most certainly will.”

New legislation could also reignite debate within the industry about how increased brewery sales affect restaurants, liquor stores and distributors.

Jack Milani, legislative co-chairman of the Maryland State Beverage Association, said he was concerned about the idea of ​​unlimited production and sales, but wanted to see the full proposal before passing judgment. Milani, who served on the task force, said Monday afternoon he had not received a copy of the proposal or a memo about its contents from the comptroller’s office.

“Our concern is to ensure that any legislation considered takes into account that there are many family businesses that are retailers, and that whatever is offered is fair to everyone,” said Milani, co-owner of Monaghan’s Pub in Baltimore.

The Comptroller’s Office asked Gov. Larry Hogan to submit the legislation as a cabinet bill. These bills are usually heard by the legislature, although it is not mandatory.

Franchot said the legislative package is based on the findings of the 40-member task force he convened in response to state brewing legislation in 2017 and needed for Maryland to compete with neighboring states for the development and investment of the brewery.

An economic impact study by the state Bureau of Revenue Estimates, commissioned by Franchot’s task force, found that the craft beer industry contributed $802.7 million to the state’s economy and supported approximately 6,500 jobs in 2016. Craft beer production in Maryland has grown at an annual rate of 15%. , lagging behind the national annual growth rate of 18 percent.

Franchot blamed outdated laws and burdensome regulations for stifling growth and discouraging the opening of new breweries. According to the task force report, Maryland’s craft brewery regulations are much stricter than those in Virginia, Delaware, Pennsylvania and Washington, D.C.

For example, breweries in those states aren’t limited in the amount of beer they can sell on-site, and none have a “buy-out” clause like Maryland’s, according to the report.

In addition to eliminating caps on how much breweries can produce and sell, the legislation would eliminate the “buy-out” provision and give local jurisdictions oversight of dining room hours. The legislation would also overturn rules that prevent self-distribution at very small breweries and limit contract brewing, in which a start-up brewer hires a larger one to make their beer.

The comptroller unveiled his plan Monday at Union Collective, the former Sears distribution center in Medfield that Baltimore brewer Union Craft Brewing is converting into an expanded brewery with space for other small makers.

Speaking above the buzz of construction and flanked by the three founders of Union Craft, Franchot praised the young brewery for its growth “in the face of statutory and regulatory hurdles that have made it harder for this industry to do business”. .

“What you are looking at is the face of progress,” he said.

Founded in 2011, Union Craft announced plans in May to turn the 10½-acre site into a larger brewery, with a production capacity of 30,000 barrels per year, more than double its current output. Baltimore Whiskey Company, Vent Coffee Roasters, Charmery ice cream shop and hot sauce brand Huckle’s are among the other businesses that will be moving into the facility.

Adam Benesch, one of the company’s founders, said Franchot’s proposal would remove a sense of uncertainty about Maryland’s commitment to the brewing industry.

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Although the current regulatory environment has not prevented Union Craft from expanding, the company has taken more cautious steps, such as planning a smaller tasting room in response to caps on the number of barrels they can serve there.

“We’re not going to build something that holds more people than the beer we can serve,” he said. “While we think the community wants something like this, we’ve had to back off until those laws change.”

“That uncertainty is really what’s holding us back from being able to move forward and grow as quickly as possible,” Benesch said.

Senator Ronald Young, a Democrat who represents Frederick County, also spoke in favor of the legislation at Monday’s event.

Maryland’s largest craft brewer, Flying Dog Brewery, halted a major expansion of its operations in Frederick in October, which CEO Jim Caruso attributed to updated state regulations.

Young said Franchot’s proposed changes would ensure continued growth for companies like Flying Dog, which make a valuable contribution to the state’s economy, but acknowledged that the path to achieving the comptroller’s goals could be difficult.

“It’s going to be hard work here,” he said.

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