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Hearing on Md. craft beer proposals produce heated exchanges

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Competing bills under consideration by lawmakers would lift restrictions on the state’s craft brewing industry or impose new ones. (File Photo)

ANNAPOLIS — Lawmakers Friday pushed back against what they said was an unfair criticism that they are trying to kill the state’s craft beer industry.

The comments and sometimes testy exchanges were part of a hearing on a number of bills that would either expand, on in one case, place further limits on small independent brewers.

“Since last summer, since last session, I think the criticism has been unfair,” said Del. Warren E. Miller, R-Carroll and Howard and a member of the House Economic Matters Committee.

Miller and others, including Del. Dereck E. Davis, D-Prince George’s and chairman of the committee, said the issue has been inflamed by social media activities of small brewers.

“When you have some of your members making statements on social media, it’s really not helpful to their cause,” Miller told representatives of the Maryland Brewer’s Association. “If the tenor doesn’t change, I suspect it will be rough times.”

Miller’s comments come as his committee held hearings on a number of bills affecting the craft brewing industry, including one proposed by Comptroller Peter Franchot.

Franchot’s proposal calls on lawmakers to change nearly a dozen provisions he says hold back brewers and restrict industry growth. Franchot proposes 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.

The focus of the bill is to expand on a law passed last year that enabled Guinness to open a brewery in Baltimore County.

Lost in the debate, according to Davis and others, were the benefits to smaller brewers of last year’s law, including expansions on the size of samples and amounts that could be sold on site as well as legalizing contract brewing — a practice that allows smaller startup breweries to have larger ones brew their product but which was illegal until last year.

Davis and others described brewers and Franchot as ungrateful and failing to recognize what the legislature had done for the industry in 2017.

Ironically, their response is House Bill 1052, legislation that would eliminate all those changes from last year. Another would create a task force that looks at whether to remove the comptroller’s authority to tax, regulate and enforce laws on the alcohol industry.

“We thought we were doing the right thing,” said Del. Talmadge Branch, D-Baltimore City and sponsor of a bill that rolls back craft-brewing law. “Sometimes, Mr. Chairman, we get it right, and sometimes we do not.”

The proposal sponsored by Branch and Davis repeals the 2017 changes that created buyback provisions, laws on taproom hours, local licensing, customer sampling and contract brewing.

Davis said those changes helped the industry but that lawmakers felt unfairly targeted.

“There was no acknowledgment of the good things,” Davis said, adding that he had hoped for a civil discussion on needed changes. “That hasn’t happened this past year.”

Alan Beal, chief operating officer of Seawolf Brewery in Annapolis, said his small startup is looking to rapidly expand, including the development of concept restaurants outside of Maryland. Beal said the state’s laws make it difficult to expand the business, and his company is looking at other states to be home for their brewing operations. Beal acknowledged that some changes last year were helpful.

“We can do better as a state,” Beal told legislators.

The hearings on a number of bills, including some sponsored by lawmakers that borrow individual components of Franchot’s omnibus proposal, turned occasionally testy, including testimony criticizing lawmakers for their campaign contributions.

Del. Benjamin Kramer, D-Montgomery and lead sponsor of the bill that would create a task force to look at removing the comptroller’s role on alcohol enforcement and regulation, said he was concerned by Franchot’s advocacy for the craft beer industry and a lack of attention to public safety and welfare concerns.

“What I heard pretty clear was that the chief enforcer of alcohol laws in this state has made a crusade of this expansion that will create unprecedented availability of alcohol in this state,” Kramer said.

Franchot, who spoke late in the afternoon in favor of his proposal in House Bill 518, repeated themes that last year’s laws were hammered out in “backrooms,” a description lawmakers railed against most of the afternoon.

“This demonstrates a complete indifference and fundamental hostility to Maryland’s craft breweries,” said Franchot, saying Maryland’s industry lags behind national and regional averages.

“The primary culprit is not any one of us,” said Franchot who the laid the blame “on our laws.”

“If House Bill 518 is the lighted path forward, then House Bill 1052 is the death knell for Maryland’s craft breweries,” said Franchot.

But the hearing turned testy again with Franchot reading back quotes Branch made about last year’s legislation and Davis calling out the comptroller and his staff for failing to file a report by October as required.

“So is (Kramer’s bill) about public safety or is it about that we’re late with our TPS reports,” Len Foxwell, Franchot’s chief of staff, said to Davis, referencing the movie “Office Space.”

In another exchange, Del. C.T. Wilson, D-Charles, said he was “shocked” to see Franchot taking up for the craft brewers he is supposed to regulate.

“You’re lobbying for them,” said Wilson.

“I am not lobbying for them,” said Franchot. “I’m sticking up for innocent people who have become political pawns in a very ugly campaign.”

At one point the exchange was interrupted by Del. Sally Y. Jameson, D-Charles and vice chair of the committee.

“We need to keep this civil,” Jameson said.

Wilson then called on Franchot to stop the social media jabs.

The comptroller made “a peace offering” and invited lawmakers to join him for a beer after the hearing but also called on the committee to pass his bill without amendment noting a similar law passed in Virginia pushed that state ahead of Maryland.

“Obviously there is a lot of frustration up there about how I address you or you address me,” Franchot said. “It’s not about us. It’s about this wonderful entrepreneurial sector.”

 

 

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