Md. beer brawl comes to a frothy head

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ANNAPOLIS — A brewing fight over the craft beer industry will come to a head Friday afternoon.

On tap is a fight between the Maryland comptroller, who has made himself the standard bearer for the state’s independent small brewers, and lawmakers on the House Economic Matters Committee who are irritated by what some say is a showboating populist masquerading as the state’s chief enforcer of liquor laws and collector of alcohol taxes.

Comptroller Peter Franchot is expected to lead the charge for changes he says will allow small brewers in the state to better compete with surrounding states and allow Maryland to expand what he calls the state’s next important manufacturing industry. Lawmakers on the committee have a message of their own, introducing bills that roll back laws passed a year ago that benefited those same brewers and a bill that will look at possibly taking the regulatory authority away from the Office of the Comptroller.

“Ultimately, Friday is not about Peter Franchot,” said Len Foxwell, the comptroller’s chief of staff. “And, frankly, it’s not about his detractors. It’s about the future of Maryland’s craft beer industry and whether we are going to give this amazing team of innovators the tools to succeed or whether we’re going to continue to hold them back with dysfunctional, outdated laws.”

Franchot’s bill incorporates findings from his Reform on Tap task force, a panel top-heavy with representation from the craft brewing industry.

The proposal calls on lawmakers to change nearly a dozen provisions Franchot says holds back brewers and restricts industry growth, including removing limits on the amounts of beer that can be brewed and sold at a brewery, lifting restrictive hours of operation, and allowing small brewers to self-distribute if they so choose.

Kevin Atticks, executive director of the Brewers Association of Maryland, said the industry is mobilized by both Franchot’s bill and legislative efforts to roll back state laws.

“We’re taking it as a threat, but mostly it’s a distraction from the reform efforts that are afoot,” said Atticks speaking about two bills aimed at the industry and the comptroller.

Atticks said it’s a message to the industry but that it won’t chill his group’s focus.

“It has done quite the opposite,” said Atticks. “It has energized the industry and reminded the industry that it lives in a state that has arbitrary limits for which there are no policy rationales.”

Some lawmakers on the committee, irritated by Franchot and what they see as an ungrateful industry, responded with two bills that some say are meant to send a message.

“For a year, we’ve heard how bad House Bill 1283 was,” said Rep. Dereck Davis, referring to a bill passed last year that expanded craft brewing and enabled Baltimore County to attract the Guinness Open Gate Brewery and Barrel House.

But Franchot and small brewers point to restrictions in the law that they say puts them at a competitive disadvantage, including limits on hours of operation; a ceiling of 2,000 barrels that can be sold on site; and provisions requiring brewers to sell to distributors and then buy back their own product.

Davis said he believed last year’s effort expanded the market but that he was willing to roll the law back to 2017 rules, leaving intact a provision that allowed a new Guinness brewery to open in Baltimore County.

“All this bill does is put us back to the way we were before we passed that so-called awful bill that was was so terrible to the industry. It’s a mea culpa,” Davis said. “We left Guinness because they said they didn’t have a problem with what we did. Everyone else that was impacted by the bill said it was a terrible thing. All we’re doing it putting everything back the way it was (before last year) when everyone appeared to be happy, content with the way things were.”

Foxwell, in a post on Facebook, said the bill is the legislature offering “an extended middle finger to the Maryland craft beer industry,” which drew a pointed response from Davis.

“I’m a grown man. I don’t hang out on Facebook and social media,” said Davis.  “That’s for the comptroller’s office. That’s what they do. No. 2, the comptroller and his chief of staff know me very well. I don’t do middle fingers and things of that nature. If I got something to say, I will come directly and to your face tell you what’s on my mind and those two know that better than anybody.”

The back and forth has left the industry somewhat trapped in the middle, prompting advocates to also look at a handful of bills that each take portions of Franchot’s proposal.

Foxwell said the comptroller believes an omnibus approach is best for the industry.

Another bill appears to be a more direct shot at Franchot, creating a task force to examine whether the comptroller’s office should continue to regulate and enforce laws on the alcohol industry.

The proposal, sponsored by Dels. Benjamin Kramer and Warren Miller, a Montgomery County Democrat and a Republican from Carroll and Howard Counties, respectively, comes after House Speaker Michael E. Busch raised the specter of such an action in December in response to Franchot’s advocacy.

“I have concerns that a person who is supposed to regulate the industry as part of his job is allowed to accept political contributions,” Miller said. “I have concerns that inspections of manufacturers of alcohol in this state may be lax. And I would say I have concerns that the comptroller and his chief of staff spend a majority of their time at breweries in Maryland for photo ops and getting beers named after them when there are many other roles the comptroller is supposed to fulfill in Maryland as a regulator.”

Foxwell bristled at the suggestion that donations are a factor and noted that many of the larger brewers and distributors oppose the changes sought by his boss.

“Do we really want to go down that road?” said Foxwell. “Do we really want to have a conversation about how the first week of January Annapolis becomes a Roman bacchanal of corporate lobbyists, all of whom have pending financial issues before the Maryland General Assembly? We’re more than happy to pull Delegate Miller’s (campaign finance) reports and have that discussion.”

Miller said Franchot has a greater impact on the industry than any other one man and “isn’t doing a very good job.”

“Let’s be very clear and fair here: For me to be effective in the House of Delegates, it’s me and 70 friends who have to pass a law,” Miller said. “I in and of myself have no ability as one legislator to propose a law and ensure that it will be passed. It takes work across the board. That’s very different than the comptroller of Maryland. One man who’s received massive contributions from this industry, that has to regulate them. There’s no oversight for the comptroller. So, whether he does a good job or a bad job and whether those contributions go into account, I think that’s a very valid question for him.”