Senate Hearing for HB 1283: Branch’s Testimony Puts Maryland Beer Law Dysfunction in Full View
If you’ve been keeping track, you know yesterday was a big day for the Maryland beer community, as House Bill 1283 went before the Senate Committee for Education, Health and Environmental Affairs – the video of which is now available for viewing.
While it may be tempting to simply focus on the echo chamber of those who are on the side of brewers – for instance, Maryland Comptroller Peter Franchot’s passionate message to the Senate committee – one of the things I’ve mentioned time and time again over the past few weeks is our inability to pin down a defense of how we got to where we are today.
Yesterday’s testimony shed some light on that, so this will be the first in a series pulling that apart.
Why Critical Analysis of HB 1283 Supporters Is So Important
House Bill 1283 is simply a microcosm of a much larger problem in our state. It is also probably the first of many battles where we will see these arguments played out both in public and in private, as the craft beer industry continues to evolve and grow, in spite of Maryland’s reputation for its suffocating stranglehold on brewers.
Because, even if the brewers were able to get everything they wanted – a full restoration back to normalcy and a reasonable discourse that involved actual compromise (as opposed to the compromises made behind closed doors on their behalf in the House) – that kind of victory would not change the attitudes of the industry’s detractors.
We wouldn’t suddenly have wholesalers, retailers and sympathetic legislators going home, tail between their legs, saying, “Well, it’s been a good run, but I guess Maryland is craft beer-friendly now! What’s for dinner?”
There would simply be another issue next year – and the year after, and so on – where this same fight would be brought up again.
Virginia Is Making Us Look Stupid About Craft Beer, and They’re Richer for It
Sadly, our neighbors to the south continue to laugh at us all the way to the bank with their beer tourism dollars – and rightfully so – for the backward-thinking beer legislation that Maryland is known for that got us into this mess in the first place:
— Todd Haymore (@VACommTrade) March 29, 2017
In case you needed a reminder, unlike Maryland, Virginia doesn’t eye brewers with suspicion; they empower them and regard them with pride. They even have a full section of their state website dedicated to craft beer.
(No, we don’t have one on our website.)
But my personal favorite is last year, when I attended Organarchy’s Beyond Brewing Forum as a sponsor and got to see Haymore speak to brewers and potential hop growers, back when he was their Secretary of Agriculture – he is now the Secretary of Commerce and Trade.
You can read his full talk here, but here’s a quick excerpt:
Virginia generates about $52 billion a year in annual revenue and over 300,000 jobs all across the state – in the suburbs or Washington D.C., down the Eastern Shore, and all the way to Southwest Virginia. And the craft beverage industry – particularly craft beer – plays an incredible role in helping us build that new Virginia economy.
I was joking with my friend from Maryland here about the government being here to help you; I think in Virginia we really do that right … Not only do we want you here growing your business, we want you expanding it …
If you don’t take away anything else from the conference, it’s this: Virginia is all in with craft beer. (NaptownPint.com)
I said it then, but it seems sadly relevant once more:
I would die to hear a speech from someone in Maryland like one above from Secretary Haymore of Virginia.
For someone to stand up and say, “Maryland is all in with craft beer.”
An industry that not only creates jobs and nurtures culture directly within the confines of their communities, but also empowers farmers with new value-added agriculture opportunities.
But, as the testimony from Del. Talmadge Branch – the original sponsor of HB 1283 – from yesterday shows, we are a very long way from that.
Del. Talmadge Branch’s Testimony at the Senate Hearing for HB 1283 on March 29
Below is a partial transcript of his testimony, excluding his introduction, as well as his closing. The latter merely referred to testimony that would be given by other parties on compromises and an expression of interest in the thoughts of the committee on the matter.
Del. Talmadge Branch: Much has been said about this legislation, and it is easy to get distracted. But the facts have a nice way of cutting through it all. So, we will stick to what is in the bill, and why the House did what it did, and what areas may be subject to further discussion.
This bill is an attempt to help the industry – not hurt it at all.
First, here is what the bill does.
- We raised on-premises consumption from 500 barrels to a maximum of 3,000 barrels – a 500 percent increase.
- We limited the retail operation of breweries to 9 p.m. Sunday through Thursday, and 10 p.m. on Friday and Saturday.
- We clarified that beer sold at the brewery must be brewed at the brewery. This is inherent[?] law.
- We changed the sampling law to allow for pints of samples – opposed to the 3 ounces in the original law.
- We changed the process for obtaining a class D retail license, requiring breweries to seek approval from the local licensing board, rather than mandating that the local board issue the license?
What prompted us to do this?
Well, we had hearings, subcommittee hearings and it became clear that we were not going to make everyone happy.
We had the Brewers Association that wanted a laundry list of things – including more barrels.
Diageo that wanted more barrels.
And retailers and wholesalers who defended the three-tier structure.
And our constituents that wanted to patronize these new breweries.
We passed a bill that gave some and took some from everyone. I think they all are a little unhappy – and that usually is a good sign of a good bill:
- The retailers and wholesalers wanted the hours limited and no increases in barrels. We restricted the hours and increased the barrels 500 percent.
- The brewers wanted unlimited hours unlimited barrels and late hours. We gave them more barrels and limited their hours to when most brewers were open. I think of all brewers, you have maybe five that are open past the time 10 p.m.
- And Diageo got the barrels they needed to move forward.
No one got all that they wanted. What can be worked on?
We understand there are some issues around whether brewers can contract the brewing of their beer – tenant law does not specify or allow contract brewing – so, I am open to that discussion.
We also understand there are some issues around the hours – I don’t think breweries designed for tourism need to be open until midnight. Bars are open until midnight.
But is some minor change in order? [Pause] We can discuss that.
Keep in mind, ladies and gentleman, that taprooms were designed for promotion of their product – the marketing of it – to allow one to taste, tour and go out and buy or market the product – not to be a bar.
Wait a Minute, I Thought He Said These Weren’t His Amendments?
When I spoke with Branch last week, I was struck by his words and his tone, as they were both clearly used to put a distance between himself and the new version of the bill.
To refresh your memory, here is what he said to me:
“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.” (NaptownPint.com)
Apparently, between last week and yesterday afternoon, Branch remembered that this was, in fact, a collective effort in the House, and he was a participant.
In addition, he positions the unanimous passage of this set of amendments as not being a compromise “worked out” by the parties involved – including brewers – but rather an attempt by the House dole out a little give and take for everyone.
In his words, “that’s usually the sign of a good bill.”
In my words, that is the complete opposite of everything I have been hearing for the last week, so how do we reconcile these two contrary narratives?
What’s more, how do we accept that this was just the House doing its job, when Del. Eric Luedtke recently commented:
“All I will say is I should’ve voted against it. We didn’t know how bad it was when it came across.” – Del. Eric Luedtke (Source)
Stop Saying We’re Open for Business, Because We Aren’t for Craft Beer
But today’s missive isn’t about the genesis of the bill, but rather how Branch’s testimony illustrates Maryland’s general attitude toward the craft beer segment. Yes, we may have “Open for Business” proudly emblazoned on all of our state signs, but are we really?
Branch’s testimony would imply otherwise.
While he says that everyone is “a little unhappy,” it’s really the brewers that are being forced to bear the brunt of this bill. Both in obvious ways, like operating hours, and more subtle ways, such as breweries now needing to go to the county liquor boards to get their on-premises consumption permits, instead of it being mandated as part of the license they acquire.
And again, I want to know why.
Brewers weren’t asking for unlimited hours, as Branch suggests. His original bill was a repeal he sought to limit hours on his own, after hearing from retailer interests about brewery taproom interference.
But that interference has yet to be quantified, and damages still go on record in vague terms.
Even with that glaring gap in the argument, the assertion by Branch is fundamentally flawed. The brewers weren’t making astronomical demands regarding hours. In fact, here is what House Bill 1420 – the Modern Brewery Bill – stated on that issue:
Unless otherwise determined by a license issued by a local licensing board, the hours of sale for beer sold for on-premises consumption are (1) 10 a.m. to 10 p.m. on Sunday through Thursday and (2) 10 a.m. to midnight on Friday and Saturday. (Found on page 3)
In short, they still deferred to the county.
Originally, brewers sought to level the playing field in other ways, because Maryland fully embraces a level of county-by-county beer law dysfunction that is mind-boggling and not the status quo in the rest of the country.
Unfortunately, when brewers sought fairness, they got a full-palm slap in the face.
We Still Should Not Be in This Position
The thing that infuriates me the most is that we should not be in this position in the first place. We had an opportunity to not only bring our Maryland beer laws out of the dark ages, but also bring Guinness to town – a win for everyone.
But we chose the path of looking like children who can’t stop fighting and flinging dirt at each other to see that all we’re doing is creating a very unhealthy, negative discourse about beer in our state.
And as soon as all of the other bills based on progress and actual compromise were tabled – around five in total – in favor of bootstrapping the hell out of a repeal bill with a bunch of amendments, brewers were left trapped in a defensive posture.
Now, they have to keep everything from going off of a ledge, putting them in the unenviable position of having to negotiate their hours and other issues – restrictions that should have never been requested in the first place. In this scenario, no matter what they do, someone on their side will lose.
It’s as if everyone else forgets that brewers are small business owners, too.
“This brewery is my livelihood. It’s how I pay my mortgage. It’s how I put food on my table. This is my life.”
Remember, This Is Not Over Yet
While parties are actually coming together to try and pull apart this mess of a bill and put it back together in a way that is not devastating, you should still be contacting your local senators, if you oppose the current set of amendments proposed in HB 1283.
I will also be sharing more analysis later on.
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On a related note, I wanted to thank WAMU and The Kojo Nnamdi Show for having me on as a guest yesterday to talk about this issue.