{"id":7772,"date":"2017-03-29T07:00:53","date_gmt":"2017-03-29T11:00:53","guid":{"rendered":"https:\/\/www.theseventhstate.com\/?p=7772"},"modified":"2017-03-28T18:16:22","modified_gmt":"2017-03-28T22:16:22","slug":"is-maryland-trying-to-punish-craft-breweries","status":"publish","type":"post","link":"https:\/\/www.theseventhstate.com\/?p=7772","title":{"rendered":"Is Maryland Trying to Punish Craft Breweries?"},"content":{"rendered":"

By Adam Pagnucco.<\/em><\/p>\n

Craft breweries have been growing rapidly in Maryland and elsewhere, forever changing the beer business.\u00a0 Maryland scored a huge win a couple months ago when Diageo announced their intention to open a $50 million Guinness brewery in Baltimore County<\/a>, creating a tourist attraction<\/a> and dozens of jobs.\u00a0 Best of all, unlike many employers, Diageo is not asking for one thin dime of public subsidy to come to the state.\u00a0 But instead of welcoming the new facility with open arms, the House of Delegates reacted by making it harder for Diageo to do business here, as well as many other breweries in Maryland.<\/p>\n

The debacle began when Diageo asked for a change in state law<\/a> to allow them to sell 5,000 barrels of beer at a restaurant and tap room on the brewery site. \u00a0(Maryland\u2019s current limit of 500 barrels is by far the lowest in the nation<\/a>; the second-lowest state, North Carolina, has a limit of 25,000 barrels<\/a>.) \u00a0Other brewers sought a limit of 4,000 barrels in on-site sales for their own operations and five different bills followed.\u00a0 HB 1283<\/a> was the one that passed the House of Delegates and did three main things.<\/p>\n

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  1. It increased the on-site sales limit to 2,000 barrels. Breweries could apply to the Comptroller for permission to sell another 1,000 barrels on-site, but they would have to go through a distributor to do so.\u00a0 That means the brewery would have to brew its own beer, then turn it over to a distributor, then receive it back from that distributor and of course pay the distributor a fee for its service.\u00a0 Guess who ultimately pays that fee?\u00a0 That\u2019s right, you the customer!<\/li>\n<\/ol>\n
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    1. It established closing times for tap rooms of 9 PM during the week and 10 PM on weekends, down from local closing times ranging from midnight to 2 AM.<\/li>\n<\/ol>\n
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      1. It limited tap room sales to beer brewed on-site only. This repeals a long-standing practice in which brewery tap rooms supplement their own products with contract beer brewed for them by other breweries.\u00a0 Such contract beer sales are major sources of revenue for some craft brewers and make tap rooms more attractive to customers.<\/li>\n<\/ol>\n

        Brewers characterized the combination of changes as \u201cone step forward and two steps back\u201d<\/a> and predicted layoffs and business losses.\u00a0 Why would the House pass such a bill?<\/p>\n

        One of the biggest opponents of liberalizing rules on craft breweries is the Maryland State Licensed Beverage Association<\/a>, which represents restaurants and small alcohol retailers.\u00a0 The group is particularly influential in Annapolis as its PAC has contributed over $180,000 to state politicians since 2005.\u00a0 The association sees craft brewers as competition for its members.\u00a0 From a zero-sum perspective, every pint purchased in a brewery tap room is a pint not purchased in a restaurant or package store.\u00a0 But that view doesn\u2019t recognize the synergies between these types of establishments as well as their differences.\u00a0 Diageo\u2019s brewery has the potential to be a major tourist facility, bolstering the entire local economy.\u00a0 And if a consumer purchases a new product at the Diageo site and likes it, he or she will be motivated to buy that same product at restaurants and stores.\u00a0 That means more business for everyone.<\/p>\n

        Some brewers would prefer that HB 1283 simply die in the Senate because of the problems it would cause, but it\u2019s not so simple.\u00a0 If the bill dies, the state\u2019s current on-site sales limit of 500 barrels would stay in place.\u00a0 That could cause Diageo to cancel its project, costing Baltimore County a $50 million tourist attraction that other states would kill to get.\u00a0 Think of the impact that would have on the industry\u2019s perception of Maryland.\u00a0 If we lose Diageo, what other major brewer would ever relocate\u00a0here?<\/p>\n

        Maryland has a number of anti-competitive laws on alcohol, including the much-loathed prohibitions on sales in most grocery stores and Montgomery County\u2019s dysfunctional liquor monopoly.\u00a0 The last thing we need is even more of these laws, especially if it causes us to lose a major employer and gives us a national black eye.\u00a0 HB 1283 must be fixed.\u00a0 Cheers to the State Senate if they can get it done.<\/p>\n","protected":false},"excerpt":{"rendered":"

        By Adam Pagnucco. Craft breweries have been growing rapidly in Maryland and elsewhere, forever changing the beer business.\u00a0 Maryland scored a huge win a couple months ago when Diageo announced their intention to open a $50 million Guinness brewery in Baltimore County, creating a tourist attraction and dozens of jobs.\u00a0 Best of all, unlike many … Continue reading Is Maryland Trying to Punish Craft Breweries?<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[151,119],"tags":[1545,1445,1046],"class_list":["post-7772","post","type-post","status-publish","format-standard","hentry","category-adam-pagnucco","category-alcohol","tag-adam-pagnucco","tag-alcohol","tag-alcohol-reform"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p4mKJE-21m","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/7772","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7772"}],"version-history":[{"count":3,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/7772\/revisions"}],"predecessor-version":[{"id":7775,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/7772\/revisions\/7775"}],"wp:attachment":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7772"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7772"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7772"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}