Emotions ran high at the Miller Senate Office Building in Annapolis yesterday, as more than 40 brewers, community members, and small business owners packed a committee hearing to debate the potential ramifications of HB 1283—a piece of legislation that passed unanimously in the House of Delegates last week.
The bill, which the Brewers Association of Maryland (BAM) says causes “fundamental setbacks” for breweries across the state, raises the cap on yearly production to 3,000 barrels with the caveat of restricting taproom hours and impeding contract brewing—a collaborative process that has helped many small beer businesses get off of the ground.
It was drafted in light of Guinness’ recent decision to build a large-scale brewery and taproom in Baltimore County just outside of Halethorpe.
Taking into account that Guinness would need to brew much more than the 500 barrels per year that the state currently allows, BAM partnered with Diageo—Guinness’ parent company—to create a bill that would level the playing field for all breweries. That legislation, along with other collaborative bills with multiple sponsors, was pushed aside in favor of HB 1283.
“There was no discussion with the Brewers’ Association,” says RavenBeer founder Stephen Demczuk, who sits on the board of BAM. “The legislators were under the assumption that there was a compromise with us, but there was no such thing.”
Following the unanimous decision in the House, BAM got to work writing amendments to HB 1283 as it is written. In its current form, the bill would require taprooms to close at 9 p.m. on weekdays and 10 p.m. on weekends, as well as prohibit contract brewing—a practice where smaller breweries share space at larger facilities with the intention of selling their beers off-site.
Backed by the Maryland State Licensed Beverage Association (MLSBA), the bill takes into account the viewpoints of surrounding bars and retailers that would face competition from taprooms with increased production.
“They’re trying to say that we’re acting like bars,” Demczuk says. “Even though we don’t serve liquor, wine, or mixed drinks. And we don’t serve food.”
Adds Waverly Brewing Company co-founder John Marsh: “No one is giving us any facts on the other side of this legislation. The wholesalers and the retailers aren’t telling us exactly how we’re impacting their business. No one is saying, ‘Hey a certain percentage since we’ve seen this uptick in breweries have affected us by x percent.’”
The sponsors of HB 1283, who brewers say have remained relatively quiet regarding the reasoning behind their support, testified before the Senate's Education, Health, and Environmental Affairs Committee yesterday that taprooms are meant to promote the products of their breweries, rather than act as bars.
“This bill is an attempt to help the industry, not to hurt it at all,” said Delegate Talmadge Branch, who sponsored HB 1283. “It’s become clear that we’re not going to make everyone happy. We passed a bill that gave some and took some from everyone. I think they’re all a little unhappy. But that’s usually a sign of a good bill.”
Rather than oppose the bill entirely, BAM opted to support it with a number of proposed amendments—which included maintaining the current operating hours for existing breweries and allowing contract brewing on an as-needed basis during times of expansion. (Specifically, BAM introduced an 80-20 percent ratio of on-to-offsite brewing.)
“With the proposed amendments, this bill will provide a path forward for our industry,” testified BAM’s executive director Kevin Atticks. “Do we love it? No. Are we happy with it? Frankly, no. However, in the spirit of collaboration, we have been in discussions to try to come to language that will mitigate the impact that this bill will have on existing breweries.”
Collectively, testimony from opponents reflected their general disappointment with the implications of the bill as it is written. Carly Ogden, who co-owns Attaboy Beer Co. in Frederick, spoke to the bill’s possible financial outcomes, stating that she could be forced to lay off employees if rollbacks slow down business.
“We invested our life savings, wrote a business plan, borrowed a chunk of money, and then signed a 10-year lease,” said Ogden, who opened Attaboy with her husband, Brian, less than a month ago. “We can’t go backwards. Right underneath us the playing field is changing, and it’s pretty scary.”
But the bill’s supporters say that the increase breweries are asking for is particularly drastic, arguing that less than one third of breweries in the state currently operate past 10 p.m., and that the majority of brewing facilities don’t come close to the current cap.
“We currently have a 500-barrel limit that produces 125,000 pints per year . . . and you wanted a ten-fold increase,” said state delegate Dereck E. Davis, in defense of the bill. “So that’s where the dilemma is. The only reason this is on the table is because of the [Diageo] development.”
Many speakers addressed other potential ripple effects, including blows to tourism and community outreach, as well as severed relationships with third-party businesses that typically partner with local breweries.
City Brew Tours’ regional manager Barry Hansen—whose organization chauffeurs craft beer lovers around Baltimore City to experience multiple different breweries in one night—argued that curtailed hours would significantly hinder his business.
“Tourism doesn’t end at a set time,” Hansen said, mentioning that most of the brew tours end after 11 p.m. “Tourism is an experience. Nightlife and breweries are experienced later on, but that doesn’t have to take away from other parts of the economy.”
The room erupted in applause after testimony from Comptroller Peter Franchot, who has been vocal about his support for the local craft beer industry and even attended a rally for the breweries held at Key Brewing Co. in Dundalk Tuesday night.
“This piece of legislation, which was sold as a compromise bill, is actually anything but,” Franchot said. “It’s nothing short of reckless in the sense that it is, as we speak, killing the craft brewing industry in the state of Maryland. All across the country, the message is being communicated that Maryland does not appreciate its craft brewers.”
BAM’s members remain hopeful that the Senate’s vote—which will determine the fate of the proposed amendments and is expected to occur within the next few days—will end in a real compromise.
“We’re up for a fight,” Demczuk says. “The sentiment is, we don’t want to go negative, we want to go positive.”