House Bill 1283 Seeks Significant Restrictions and Rollbacks for Maryland Craft Brewers – Why?
Oh, What a Week It Has Been…
We’ve had a couple of days to relax this weekend, but the next few days are going to be critical for the Maryland craft beer community, so let’s get back to it – because there is still a big elephant in the room we need to address.
It was around this time, exactly one week ago, that a bomb dropped in the Maryland craft beer community: The Maryland House of Delegates had voted unanimously to push through a new version House Bill 1283, which was even worse than the original.
What’s more, it was positioned within the House as a “compromise” that had brewery support, in order to get those votes – a seemingly intentional, but untrue assertion made by unidentified players.
It’s a nasty affair, so it should come as no surprise that the blowback was swift:
- Maryland brewers quickly went on record to say that not only did they not support HB 1283 v2.0, they called for swift action, because it was going to significantly hurt their small businesses in a number of ways;
- Then an anonymous insider from the wholesaler side of the equation spoke out against the bill and called for others in that segment of the industry to stand with craft brewers;
- Diageo/Guinness was also quick to express concerns, since HB 1283 went against their intent to elevate the Maryland beer scene as a whole;
- And finally, Maryland Comptroller Peter Franchot condemned the current form the bill as the result of back door deals and “crony capitalism,” calling on the Senate to fix the mess the House had created.
Next up, it goes in front of a Senate committee on Wednesday, March 29, at 1 p.m., where the fate of the bill will be discussed and decided.
Unfortunately, while this drama sometimes borders on farce, it is one that has very real, far-reaching consequences. So, while it may be tempting to let your brain shut off due to information overload, there is the aforementioned elephant in the room that needs to be put front and center:
HB 1283 is not just unfair, it’s malicious and punitive in its goal of undermining the Maryland craft beer industry.
What’s even more disturbing is that it seeks rollbacks of current laws on the books – pertaining to operating hours and contract brewing – without providing any data, facts or statistics to back up the baseless claims that Class 5 brewery taprooms are a menace to our economy.
Essentially, this bill tells Maryland craft brewers to jump through a bunch of hoops – which may include layoffs, dashed plans for growth, significant financial hardship or closing their doors entirely – and for what? To quiet the whispered, unsubstantiated anecdotes of “hardship”?
How is that fair?
Let’s be logical: On one side, we have this deafening chorus of people who are against this bill – and its backward, prohibition-like logic. The opposition, however, is comprised of unnamed parties that have yet to defend, support or take credit for this new version of HB 1283.
That doesn’t sound like a bill meant to reverse actual hardship.
And given the context of Franchot’s clear statement that this was the work of a small few, I think we can all agree that something stinks.
My Talk with Del. Talmadge Branch, the Original Sponsor of HB 1283
Del. Talmadge Branch represents the 45th District of Maryland – one of six that make up Baltimore City – and has been a member of the House of Delegates since 1995. He is also the original sponsor of HB 1283; and at the time I wrote this article, he was its only sponsor. Back then, the much more positive “Modern Brewery Bill” – HB 1420 – was the frontrunner with approximately 50 cosponsors. (Those were simpler times.)
When I spoke to him earlier this week, I asked for his side of this story on how the bill came to be.
Retailers (or interests on behalf of retailers, it wasn’t clear) had come to him with concerns – but no data or documented evidence of lost revenue – regarding brewery taprooms “interfering” with their businesses. There were even claims made to him that some breweries – which were not named – were staying open past their stated hours. (This is a very serious, but vague and unsubstantiated accusation.)
Wanting to see what was happening for himself, Branch went to visit a brewery taproom.
While he could not recall which brewery he visited, he did remember the experience in detail: “There was music playing, and food was being served,” he recounted. “But no one was there to visit the brewery, and no tours were happening. It looked like a bar.”
For him, this was enough, and the first version of HB 1283 was born.
“You have to understand, I’m not trying to hurt anyone’s business,” Branch said to me. But he also was very clear that he was not involved in this new version of his bill.
“I just wrote a bill,” he said. “I’m not in the room to work it out. These are not my amendments. I thought they had met and worked it out. There was certainly no harm intended, and I would certainly like to work something out that works for everybody. We have a hard time now, already, with employment and businesses trying to stay afloat. I’m not trying to put anyone out of a job.”
Finally, we came to my last question:
Me: Do you think it’s okay to support or pass a bill that goes out of its way to proactively punish Maryland craft brewers with a restriction of hours, without proving actual damage beyond anecdotes or subjective assessments that some taprooms give the appearance of seeming like a bar?
Branch: I’m not trying to hurt anyone’s business.
Me: I understand that, but that doesn’t answer the question.
Is it okay to support or pass a bill that goes out of its way to proactively punish Maryland craft brewers with a restriction of hours, without proving actual damage beyond anecdotes or subjective assessments that some taprooms give the appearance of seeming like a bar?
Branch: [Pause] Look, I’m not trying to hurt anyone’s business.
As a reminder, when I asked for Comptroller Peter Franchot’s response to a similarly positioned question, Franchot said: “That’s because there is no damage. There is only benefit to local retailers and to local establishments. Frankly, they should take all the barrel limits off, they should take all of the limitations away – and there still would not be any damage done to retailers, wholesalers or distributors.”
On the one hand, I very much disagree with this bill; even in its original form, it was terrible. In addition, I found myself on a number of occasions in profound disagreement with Branch’s views on brewery taprooms, during our conversation.
On the other hand, Branch appears to have acted in good faith. (Although, he should have done much more in-depth research on brewery taprooms and how they impact Maryland’s economy, before putting forward a bill that smacks of “buyer’s remorse.”)
Moreover – love or hate his politics – he states that he was just as surprised as the rest of us (although I assume pleasantly) when the House decided out of nowhere that his fledgling bill was the one they were going to run with. But only as a “compromise” that involved brewers, of course – he also said numerous times that he thought brewers were at the table when the details of the new HB 1283 were hammered out.
So, for those of you with an axe to grind, it would appear that he’s not one of the “two or three” shadow players Franchot says were behind this bill.
However, in a different interview with DCBeer.com, Branch did go into a bit more detail behind his gripes regarding taprooms, as they are currently allowed to operate:
“When you drink beer, or if you’re a beer drinker, and there’s a tavern nearby, unless you still want to drink more, the only reason you would go to the tavern is if you wanted something harder. You’re not going to go to the tavern to drink beer with a beer facility nearby.” (DCBeer.com)
As a beer drinker and avid brewery visitor, I completely disagree.
I go to a brewery when I want to have a singular experience with that specific brewery – whether that be a tour, a tasting or just hanging out for a couple of hours in the afternoon for a few pints. Period. I don’t believe the government should be able to decide what that experience should look like, nor would the restriction of the hours those breweries operate push me to go to a tavern instead.
As that wholesaler pro said last week, “The occasion doesn’t transfer; it just goes away.”
They’re right; I’ll just stay home.
However, this logic does cut in the other direction. There are times where I don’t want to go to a brewery at all – even if a brewery is in close proximity to a tavern. Why? Because, in those moments, I want variety. I want to try different styles from different breweries all over the country – or even the world.
Despite Branch’s assumptions, my desire to go to a tavern over a brewery doesn’t kick in, in those moments when I want something harder – it’s when I want something different, plain and simple.
I know I’m not alone, too, because one of the biggest challenges facing modern breweries – both established and up-and-coming – is the fact that craft beer consumers are flaky, and earning brand loyalty is not as easy as it used to be with so many choices available on the market.
Don’t believe me? A 2015 Nielsen study found that while beer drinkers overall may not be as “adventurous” with new brands as wine drinkers, “those who drink craft beers are much more likely to purchase a variety of brands.”
So, to argue that craft beer drinkers will flock to single-brewery brand experiences in droves over taverns within local proximity, should legislators allow it, is asinine. It also demonstrates a complete lack of understanding of how craft beer drinkers make purchasing decisions. (Not to mention, I typically don’t go seeking “something harder” after going to a brewery – I like my liver.)
If legislators allow breweries to flourish, guess what? There are going to be times I’m going to pick breweries over taverns. Likewise, there will be an equal or greater number of occasions when I will seek out variety and experimentation at a bar.
Truth be told, I tend to go to bars more than I go to breweries – and it has absolutely nothing to do with proximity.
What Do Other Consumers Have to Say?
In addition to the brewers, Diageo/Guinness, unnamed wholesaler professionals and the comptroller, consumers – whose purchases drive the economy – have also had a lot to say about what’s going on.
But two comments in particular stuck out in my memory:
“Exactly where is it written that government has a responsibility to limit competition to ensure that profits of existing businesses are not affected by new businesses. If I owned a grocery, could I petition my government to limit how many other groceries could open? To ensure I keep my slice of the pie? I wrote my 3 state delegates and state senator about this, too late for the house version.But my senator said he would work against the bill limiting sales. Why don’t we just pass an MSLBA tax, give it to them so they keep their income level. Maybe they’d stop whining every time somebody has an idea that doesn’t fit into their business plan.” (Facebook)
As a note, this individual’s reference to the Maryland State Licensed Beverage Association (MSLBA) was in response to the latter part an earlier post featuring an interview with Diageo/Guinness. (Check it out.)
“I get it, legislation usually doesn’t actually come about to help the public. There is always a backstage reason behind it. However, I am still interested to hear the gov explanation, complete bullshit or not, as to how we are supposed to think these bills are anything but an attack on Maryland breweries? I mean I can’t even see how one could spin this in any sort of positive light. All I see is hard working, struggling, busting their ass to make their dreams work people being told there will be more business-crippling restrictions placed upon their professional efforts. Restrictions that don’t even seem to be attempting to at least solve a problem.” (NaptownPint.com)
Between these two comments, a couple of important points are made:
- Since when do we legislate to protect businesses from plain ol’ competition? Are we going to see the General Assembly start passing a slew of bills every time a business comes and complains that their job is getting harder in the face of natural evolutions and industry shifts? Is it the job of our legislators to ensure that the status quo is always maintained for a select group of people who just happened to get to some arbitrary starting point first?
- Again, what problems are we actually solving with this bill? Where are the fiery op-eds claiming grievous harm done by the hand of those nefarious Class 5 production breweries in the state of Maryland? As that second commenter pointed out, us citizens are used to backstage maneuvering in our politics, but someone has seriously crossed the line here. (Maybe they were hoping no one would notice?)
The Detractors of Maryland Craft Brewers in the Case of HB 1283 Are Still Publicly Silent
What’s been weird is that, ever since this new version of HB 1283 dropped, the opposition to Maryland craft brewers – the apparent perpetrators of this mess – have been completely quiet.
As I write this, the MSLBA has still not responded to my repeated requests for comment; it’s been five days since my original correspondence. And while this is equally anecdotal, I feel it is worth mentioning that the conversations I’ve had with local bar owners and bartenders since I started covering this story have been in favor of brewers.
You’d think that if Maryland craft brewers were such a hammer on their businesses that offended stakeholders wouldn’t be able to contain themselves. Stories of squandered revenue and layoffs should be filling our screens, with equal passion to what you find here.
Or we could at least get some arguments about the three-tier system, which we all know are typically thinly-veiled attempts by certain groups to maintain their stranglehold on the industry. But their self-righteous posturing is still really fun to watch anyway.
(I mean, come on… peddlers of alcohol calling upon “hard-learned lessons” from Prohibition to keep the dollars flowing in their direction? How do they even say stuff like that with a straight face?)
Regardless of the opposition that could have been (but wasn’t), we’re still left with a bill that no one wants to claim responsibility for, that somehow got unanimous House support. Even Branch – the original sponsor – seemed to be distancing himself during our interview, repeatedly stating that he “just wrote the bill,” and “that it may not even pass.”
So, again, I ask you – legislators and consumers alike – as we go into this critical week, with a Senate committee hearing on Wednesday, do you think HB 1283 is fair?
Do you think it’s right to punish brewers in the following ways…
- Restricted operating hours in brewery taprooms;
- Undermining contract brewing with arbitrary serving limitations;
- Saying that counties are no longer required to issue an on-site consumption permits; and
- Requiring breweries – on their 2,001st barrel – to sell their beer to a distributor, just to buy it back again?
Because, make no mistake about it, putting these hurdles in on the books as law hurts Maryland craft brewers. This is forcing them into a corner where they need to make choices and decisions they shouldn’t have to make, without anyone proving they’ve done something wrong or harmful.
Also, let’s not forget that second to last point pertaining to on-site consumption permits is a complete 180-degree pivot from four years ago, when the House unanimously voted to afford such accommodations for on-site sales. (Why the sudden change of heart?)
Let’s Go Back to That Elephant in the Room
Like I said at the start of this, HB 1283 is a piece of legislation born of ill intent and designed to keep Maryland craft brewers “in their lane,” so to speak.
Moreover, it’s clear that a group of individuals – probably including parties representing a particular group of special interests – were less than truthful with the House delegation, when gunning for its unanimous, 139-0 passage, before it made its way to the Senate.
So, consumers, this is your call to get involved. Call your state senators (not the Maryland senators in the U.S. Senate), and tell them to oppose HB 1283 in its current form and amend it.
And to the Senate, here’s a quick recap of your call-to-action from Maryland Comptroller Peter Franchot:
“Correct the games that are being played over in the House. Protect the General Assembly from looking like a third-world Banana Republic, and do the right thing by a wonderful group of entrepreneurs who have come into our state, and have successfully put us on the map with some wonderful beer products. And how do we repay them? A big slap in the face from a group of back room lobbyist bullies. Shameful.”
It’s a big week for Maryland craft beer, everyone. Don’t let your local, small, independent craft brewers down.