Comptroller Peter Franchot Tuesday called on bar owners and liquor distributors in the state to stop being fearful of growing the state’s independent craft brewery industry.
The state’s top tax collector and chief enforcer of liquor laws has become the front man for the industry following a legislative session that included a contentious battle over the issue of allowing brewers to sell their wares on site. Franchot said fear has led the state’s licensed beverage industry to become the primary stumbling block to an effort to grow a $500 million industry in the state.
“I think this fear of less business coming to (bar and tavern owners) if we allow (breweries) to grow is just not well-founded,” Franchot said during a promotional stop at the Peabody Heights Brewery.
Franchot said the industries that make up Maryland’s three-tier system of alcohol manufactures, distributors and retailers, which dates to the end of Prohibition, need to stop fearing change. Most of the concern, he said, comes from bar and tavern owners. The comptroller said the effort of the liquor lobby, one of the most powerful in the state, is a philosophy of protecting its business by using government to choke off competitors.
“Everyone in the three-tier system is constantly complaining about the fears that this will hurt their business,” Franchot said. “First of all, welcome to capitalism and the free market.”
Franchot, whose office regulates and taxes the alcohol industry in Maryland, created the “Reform on Tap” task force in April in the wake of an effort meant to make the state friendlier to small brewers. The passed legislation — which expanded production but also limited hours for new ventures and a created a new, discretionary license process for those who want to have tap rooms for on-premise consumption — left a bad taste in the mouths of some, including Franchot.
Franchot was in Baltimore Tuesday in advance of the first meeting to announce a promotional partnership between his agency, the state Departments of Agriculture and Commerce, the Maryland Office of Tourism and the Brewer’s Association of Maryland.
“Let’s be honest, the brewers aren’t coming to Annapolis asking for anything,” Franchot said. “They don’t come to Annapolis and say, ‘Can we have some money’ like everyone else. Or, ‘Can we get some special tax break.’ Or, ‘Could you do something for us?’ Here’s what their request is: ‘Just get out of our way. Let us make beer. Let us sell beer.'”
The effort announced Tuesday is meant to promote visits to some of nearly five dozen breweries around the state. But the announcement was also used to underscore a series of meeting hosted by the comptroller at many of those same breweries that could recommend changes to how the industry is allowed to sell its products to the public.
Franchot made the announcement at the Peabody Heights Brewery in Baltimore, which received a $500,000 loan from the state in 2015 to buy the building it was renting on East 30th Street and expand its production.
Dick O’Keefe, the owner, is one of 39 members of Franchot’s task force that will hold the first of its eight meetings Wednesday at Johns Hopkins University. The panel, which favors the brewery industry, will also hold three separate town hall-style meetings.
The Reform on Tap panel is comprised of lawmakers, alcohol distributors, liquor store owners, bar owners, members of the state’s licensed beverage association and an Annapolis-area blogger who focuses on the craft beer industry.
Nearly half the members of the task force — 18 members — are affiliated with craft breweries from around the state.
“It’s a very pro-brewery task force,” Jack Milani, owner, Monaghan’s Pub in Woodlawn and legislative chair of the Maryland State Licensed Beverage Association, said. “The task force is probably going to come out very strong for the brewery industry.”
Still, Milani said he is asking his members to keep an open mind.
“I’m going into it with an open mind,” Milani said. I’m just not sure why it has to be us versus them. It’s never been that way before in the past.”
“The last thing we need is a battle between brewers and Maryland retailers,” Milani said, adding that tavern owners and other members of the industry are getting a bad rap and are not trying to block the industry.
“I think we’re being portrayed unfairly,” Milani said. “We’ve worked with breweries in the past. Our thing is we just think they should slow things down. Breweries aren’t the only ones who make business decisions based on the law. Whatever they do, they’ve got to unwind it gradually. It’s not fair to our guys to just change things drastically.”