House Bill 1283 Will Be Devastating for Maryland Brewers, and the Senate Needs to Fix It
Here’s the Short Version for Those Who Want to Help
If you care at all about small, independent local brewers in Maryland, you need to contact you SENATORS immediately regarding the recently passed House Bill 1283. In its current form, to call HB 1283 harmful to local brewers would be an understatement. In its current form, it will force layoffs. In its current form, it will prohibit growth. In its current form, it sends a clear message that Maryland does not care about its local brewers – who are small business owners.
Tell your senators to amend HB 1283 in the following two ways:
- Restoring operating hours for Class 5 breweries;
- Allow a Class 5 brewery to brew beer for others and pour its own beer it brewed at other MD breweries (“contract brewing”).
For more information, here is the official statement from the Brewers Association of Maryland.
(Oh, one last thing: If you are interested in supporting your brewers, please focus your public advocacy efforts exclusively on the Senate, not the House of Delegates. At this point, the legislation is out of the House, so your help is not needed there.)
Now, with that out of the way, how did we get here?
Unfortunately, This Story Is Not a New One
Since this week’s deadline for my beer column in The Capital (and The Baltimore Sun, as a result) has come and gone, I’m going to document this mess here. Although depending on how this story continues to unfold, you can bet I’ll be taking up some column inches to talk about this more in the coming weeks.
I will start this by freely admitting that this is a convoluted mess with a lot of players with different agendas. That said, in order to understand the urgency of what is happening right now with HB 1283, knowing what brought us to this point matters.
To start, Maryland has historically been less than accommodating for our local brewers. While strides have been made, we are still leaps and bounds behind most other states – especially our neighbor to the south, Virginia. (Read more from me on this issue.)
The biggest problem is that Maryland is a dysfunctional Frankenstein-like creature, when it comes to brewery laws. In fact, the rules that govern our small, independent state brewers vary county by county. Meaning what’s true for breweries in Anne Arundel County is only true in Anne Arundel County… and nowhere else – every county has its own playbook, and they probably don’t even have a good idea of what that playbook says.
(Hilariously enough, breweries like Flying Dog, Union or Heavy Seas weren’t even legal in Anne Arundel County until a few years ago, after my article was published pointing out the reason why.)
Logically, our brewers have wanted to create a level playing field for some time, where everyone was playing by the same rules, across the entire state. This move would finally bring us out of the dark ages of our lingering, antiquated post-Prohibition hangover.
To most sane individuals, this sounds very reasonable. Then Guinness came to town.
Everyone Was Excited About Guinness in Maryland – Even Brewers
Earlier this month, I wrote a fairly comprehensive breakdown of the original three bills that were tied up in the Guinness storyline of them wanting to build a large-scale production facility with a tasting room out in Relay, which is in Baltimore County. This project was first announced back at the end of January.
This proposal from the Diageo/Guinness camp is a big deal, especially since many others wouldn’t even bother considering Maryland, because – all together now – our brewery laws are here are a mess.
It also, however, came with a catch:
The proposal is contingent on the General Assembly’s approving a new kind of liquor license that would allow the scale of on-site sales Diageo envisions for the brewery. (Baltimore Sun)
Understandably, most everyone wanted to make this happen – yes, even the brewers. I mention this because there were some bizarre, unsubstantiated assumptions being tossed around for awhile about Maryland craft brewers not wanting Guinness in town.
That is 100 percent untrue.
As I stated in my article linked above, “Maryland brewers are all genuinely excited to have Guinness come to town — a rising beer tide in Maryland raises all ships, folks…”
The Original 3 Bills (and Where Things Start to Get Weird)
Again, if you’re really interested in more details on these bills, you should read the article I wrote. For the purposes of this overview, however, I’ll keep it brief.
The three original bills were House Bill 1420, House Bill 1391 and the original House Bill 1283.
- HB 1420, dubbed the “Modern Brewery Bill” not only leveled the playing field for all Maryland brewers (a good thing), it also had the support of Diageo/Guinness, because it would resolve the limitations of on-site taproom sales they needed gone. The best part? It had more than 50 cosponsors, and was built and championed by Del. Charles Barkley.
- HB 1391, known unofficially as the “Diageo-Guinness Bill” is what I like to call a “cover your ass bill” – just in case HB 1420 didn’t work out. It enabled the same restrictions to be lifted for them specifically, within Baltimore County, and also granted them an exception in case restrictions were placed on operating hours.
- HB 1283, even in its original form, was nasty. At the time, this blatantly punitive bill only had one single sponsor, in contrast to HB 1420’s 50-plus. The sole purpose of this bill was to roll back the current operating hours, so they wouldn’t compete with bars.
Again, to quote myself because I’m too lazy to paraphrase what’s already written:
Opposing wholesalers and retailers feel threatened by breweries that have a more retail-focused mentality in their taprooms, citing that it would hurt their businesses. Why? Consumers will go to breweries, not bars or stores, to make their purchases. (The Capital)
There are a litany of reasons as to why this makes no sense, but I’m not here to relitigate that argument.
For now, let’s just say HB 1283 caused me some angst. But given that the Maryland General Assembly had two really good options being handed to them on a silver platter – passing HB 1420 as-is, or passing HB 1391 with an amendment that made the rules apply to all brewers, not just Guinness – I was hopeful.
Then, even more good news came out…
That Brief, Shining Moment When BAM and Guinness Joined Forces
On March 7, 2017, it was officially announced that the Brewers Association of Maryland and Guinness were spoon-feeding the Maryland General Assembly another fantastic legislative option to not make a mess of everything.
“[BAM Executive Director Kevin] Atticks said he had the chance to meet with Diageo officials to work together on an all-encompassing bill that would benefit all breweries. He added that SB1172 doesn’t have much affect on the house bills and any or all of them have the potential to pass by time the General Assembly session ends April 10.
‘Diageo made explicitly clear they had no interest in carving out anything specifically for them, but their interest is getting a bill passed,’ Atticks said. ‘This was acknowledgment on their part that they do want to work with an industry they are joining and we should all have the all the same benefits and metes and bounds.’
As part of SB1172, breweries could sell more than 5,000 barrels annually, but it would require them to purchase their product back at markup from a licensed wholesaler.
The bill also puts hour limitations on breweries, setting the hours at 10 a.m.-10 p.m. Sundays through Thursdays and 10 a.m. to midnight on Fridays and Saturdays. Atticks said this was a ‘major concession’ for the Brewers Association, but it helps compromise with restaurants and bars that don’t want to compete with tap rooms.” (Baltimore Business Journal)
(Please remember that word “compromise” for later.)
While this Senate bill wasn’t perfect, it was a clear signal that both the Brewers Association of Maryland – who advocates on behalf of the best interest of small, independent brewers in our state – and Guinness were on the same page:
The crown jewel of Guinness coming to Maryland should not be won at the expense of local brewers. Period.
Soon after, invitations were given to myself and others in the area to attend events hosted by Guinness – in Baltimore, as well as Annapolis. The purpose? To provide a social, friendly forum to discuss how Guinness and Maryland brewers can work together. Also, beer drinking.
While nothing is ever as easy as 1-2-3 when it comes to passing legislation of any kind, things seemed to be moving in the right direction for the Maryland beer community.
The “Worst Case Scenario” Wasn’t the Worst Case Scenario
Prior to this week, when I initially envisioned the worst case scenario in my mind of what could happen with these bills, I simply pictured yet another delay in enabling progress (founded on principles of basic fairness) for Maryland brewers.
“Surely, Maryland legislators wouldn’t push forward legislation that would hurt this specific segment of small business owners,” I said to myself. “Of course, they might do something annoying like allowing HB 1420 die, in favor of maintaining the status quo. But to proactively take steps to damage Maryland breweries, when there were so many ways to bring Guinness to Maryland in a way that helps everyone win? Totally ridiculous!”
Tonight, however, I have the distinct displeasure of typing out my three least favorite words:
I was wrong.
I was wrong to assume that Maryland legislators would do right by Maryland brewers. I also should have watched HB 1283 like a hawk, even though it seemed to have the odds stacked against it at the time.
Meet the New, More Terrible Version of HB 1283
First, those Guinness socials designed to bring everyone together never happened; those of us who received invitations were told it was because of the blizzard that never materialized. It was a bummer, because it felt abrupt, on top of the fact that it was a lost opportunity to foster more unity around this issue at such a critical time.
At the time, I didn’t think too much of it.
Then, over the weekend, a very nasty bit of news dropped: A much uglier and very damaging version of HB 1283 had emerged from the fire and was passed with unanimous support.
Here’s what’s new and terrible about this bill:
“While the legislation raises the cap on the amount of beer a brewery may sell in its taproom, it significantly rolls back the hours for public visitation. Class 5 breweries that hold a local Class D or on-premise consumption permit are currently permitted to operate until 12am or 2am, depending on their jurisdiction. The bill lowers hours to 9pm Sunday through Thursday and 10pm Friday and Saturday.” (Brewers Association of Maryland)
Let’s ignore the mental acrobatics required to reconcile the fact that this bill assumes that breweries can sell more beer in fewer hours and focus on what’s really happening here.
Instead of blocking progress for the sake of it (my original, more innocent nightmare) the House opted to pass a bill that goes out of its way to penalize small, independent Maryland brewers by rolling back their hours. And they opted to do so unanimously. (Hat tip to Hipster Brewfus for the screenshot.)
“But wait, there’s more!”
“Another provision of the bill restricts beer sold in the taproom to beer produced at the brewery. Many startup brewers—and those who have reached production capacity—contract with neighbor brewers to assist in the production of their beer.” (Brewers Association of Maryland)
I shouldn’t have to explain why these are awful provisions, but just in case you need more convincing…
“‘Our brewery has become a popular destination for the community during the late afternoon and evenings, and this bill fundamentally changes the rules on us without our input,’ said Adam Benesch, Co-Founder of Union Craft Brewing. ‘It will change our ability to have reasonable public hours at the brewery, which will cause us to potentially lay off 5-10 employees.’ Union is considering a significant expansion this summer, though the legislation is forcing them to reevaluate the investment.” (Brewers Association of Maryland)
Still failing to see the problem, here?
Fine, here’s another:
“‘After investing almost $1 million in our operation, we will be forced to cancel proposed expansion plans, layoff employees and risk not meet investor and bank obligations,’ said Phil Rhudy of Independent Brewing in Bel Air. ‘Moreover, it will hurt the newly operational craft grain malting facility and hop growers in our county who rely on the market of small craft brewers.'” (Brewers Association of Maryland)
So, to recap, it’s still smooth sailing for Guinness, but now legislators are going out of their way to punish the craft brewers of Maryland in ways that cost jobs and cause financial hardship.
Which is just a hoot considering one of the big selling points of making way for Guinness in Maryland were the whopping 70 jobs it was bringing to the state.
Hold on, If No One’s Pants Are on Fire, Why Is There So Much Smoke?
Unfortunately, I wish I was just ending this post here with another call-to-action for Maryland craft beer lovers to call their senators, but there is still more to this story.
There is something very wrong with how things have played out.
Let’s start with what we’ve established up to this point:
We had a bill with over 50 sponsors that would have benefited everyone in HB 1420, and yet HB 1283 – which started with a single sponsor – is the one that passes through, with even harsher restrictions and full support.
Somehow this malicious makeover of HB 1283 is the horse everyone decided to back, even though there were not one, not two, but three different alternatives where Maryland, Guinness and local brewers would have all benefited.
Why did they do that? How does this even make sense?
Well, soon after the news of this latest development broke, I heard some disturbing news from multiple parties: HB 1283 passed in part because it was positioned in the House as a bill that was supported by the brewers; even though it would make no sense for them to back a bill so utterly contrary to their interests.
Not one to believe murmurs, I decided to reach out to the office of Delegate Luke Clippinger to find out whether or not this was the case. He seemed like a good guy to ask since a little research revealed that breweries, including Diamondback, are in his district.
This was the answer I received in writing via email this evening:
“It was my understanding that the Brewery Bill was a compromise.”
There’s that word again.
To be clear, the Senate bill that BAM collaborated on with Diageo/Guinness included a compromise. But I have yet to talk to a Maryland brewer today who says they support HB 1283. And I think we can all agree that the statement from the Brewers Association of Maryland demonstrates they definitely did not consider these roll backs as being part of the compromise.
(I know I’m acting like an obnoxious dog with a bone here, but bear with me.)
I want to know where this bad information came from.
More to the point, if delegates are being told Maryland craft brewers supported this abomination of a bill as some sort of “compromise” – when it’s a falsehood – who in the hell was telling them that? And why?
I really wish those were rhetorical questions, but unfortunately, I do not know enough to answer them. All I can infer with what I do know at this point is that parties unknown perpetuated the idea of nonexistent legislative buy-in from brewers on this bill.
At best, it’s sloppy. At worst, it’s willfully misleading and malicious.
Again, I’m not able to verify anything one way or the other, at the time of writing this. Plus, all I’m doing at this point is reporting on a battle already lost – now eyes turn to the Senate.
Wait, Where Is Diageo/Guinness in All of This?
You know, that’s a great question.
Since all of those goodwill events got cancelled due to the blizzard, things have been relatively quiet. The tin foil hat-wearer in me is dying to read too much into that cancellation, especially since within 24 hours of their team rolling out of Maryland, I started getting texts from multiple people saying they were hearing really bad things about what was happening in the House.
But hey, I’m a reasonable gal. I know better than anyone that bad weather in Maryland can be treacherous – I accidentally rear-ended a car last winter after skidding on some ice at a stoplight. (I still need to fix that ding in my front bumper.)
Which Brings Us Back to the Beginning
We are now in very dangerous territory.
We aren’t talking about vanity bills with modest increases or negligible decreases here and there. We are on the verge of ending this legislative session by passing a bill or set of bills that won’t just stop the growth of Maryland craft beer; it will significantly harm it.
All while Guinness is given virtually everything, along with a red carpet welcome from the state of Maryland.
I get it – no one wants to be the guy who gets blamed for losing Maryland the Guinness deal by quibbling over details like operating hours for breweries – but what cost are we willing to pay for it? Are we really willing to sell out the small business owners who make up our Maryland craft beer community to get this done?
If that’s what we mean when we’re declaring Maryland as open for business, we deserve our bad reputation on the national craft beer stage.
Because, the way things stand right now, these actions send a clear message that unless you’re flush with cash and can provide Maryland with bragging rights, you don’t matter and your successes don’t matter. Even if you’re a Maryland craft brewer.
If You Love Maryland Craft Beer, You Need to Take Action Now
So, with this in mind, I’ll say it once more with feeling:
If you care at all about small, independent local brewers in Maryland, you need to contact you SENATORS immediately regarding the recently passed House Bill 1283. In its current form, to call HB1283 harmful to local brewers would be an understatement. In its current form, it will force layoffs. In its current form, it will prohibit growth. In its current form, it sends a clear message that Maryland does not care about its local brewers – who are small business owners.
Tell your senators to amend HB1283 in the following two ways:
- Restoring operating hours for Class 5 breweries;
- Allow a Class 5 brewery to brew beer for others and pour its own beer it brewed at other MD breweries (“contract brewing”).
Because, if you’re anything like me, I’m all for Guinness coming to Maryland – but I’m not about to gut our local craft beer industry to get it done.
* * *
Editor’s Update on March 21, 2017
This is an editorial that was independently submitted to me from someone on the wholesaler’s side, regarding the issues outlined above. Click the image to read the full editorial.
Editor’s Update on March 23, 2017
Diageo/Guinness has responded. Click the image above to read my interview and more analysis.
Editor’s Update: March 24, 2017
Maryland Comptroller Peter Franchot has weighed in, in no uncertain terms, regarding his thoughts on HB 1283. Click the image above to read my interview with him.