Maryland

Maryland Considers Reforming Beer Franchise Laws

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After several years of political firestorms between reform-minded state Comptroller Peter Franchot and the state lawmakers, a key legislative committee in Maryland’s legislature has signaled a willingness to reform and loosen the state’s strict franchise laws that govern the contracts between brewers and wholesalers. According to Brewbound:

Franchise law reform is closer to reality in Maryland without the help of Maryland Comptroller Peter Franchot. The Senate Education, Health and Environmental Affairs Committee voted unanimously last week to loosen the state’s franchise laws that lock brewers into contracts with their wholesalers, according to The Daily Record.

Under the proposed changes, beer companies making fewer than 30,000 barrels annually would be allowed to exit their existing distribution agreements by giving 45 days notice and paying fair market value. Brewers making 12,500 barrels or less would be required to pay fair market value for the product remaining in a wholesaler’s warehouse, while companies making between 12,500 and 30,000 barrels would be required to pay the fee as well as the wholesaler’s marketing costs.

Currently, brewers are required to give 180-days notice and show “good cause.”…

Read more here.

Maryland Booze Laws Task Force 2.0

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As covered previously, Maryland convened a task force last year—led by outspoken state comptroller Peter Franchot—that recommended an ambitious package of reforms to the state’s outdated and anticompetitive alcohol laws. Given Franchot’s outspoken nature, the recommendations created a bit of a firestorm in Annapolis, and even led resistant state legislators to float the idea of stripping Franchot’s office of its power to oversee alcohol regulation in the state. Now, rather than adopting the recommendation’s of Franchot’s task force, Maryland has convened a new one:

A new task force is reviewing alcohol regulations in Maryland, and the members are looking at everything from production and sales to the impact of alcohol on public health.

But mainly, they'll be looking at whether it's the Office of the Comptroller that should continue regulating the industry and enforcing liquor laws.

The Task Force to Study State Alcohol Regulation, Enforcement, Safety and Public Health results from legislation passed by the Maryland General Assembly this year. It includes legislators, designees of the state Health Department and Maryland State Police and representatives of the Licensed Beverage Association, Mothers Against Drunk Driving, the medical community, manufacturers, wineries and craft brewers, local law enforcement and members of the public…

Read more here.


Montgomery County liquor control plans to fix itself ... by changing its name

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R Street has written before about Maryland's notorious Montgomery County and its liquor control department. Now, according to the Washington Post, the department is trying to change itself ... but mostly just by changing its name:

Montgomery County officials are hoping to change the name of the county’s Department of Liquor Control to something, well, a little less controlling.

The proposed name — Alcohol Beverage Services — reflects an effort to move the department’s image away from its regulatory focus and toward customer service, said director Robert Dorfman, a former Marriott executive appointed by County Executive Isiah Leggett (D) at the end of 2016.

“The old name does not have the right connotation,” Dorfman said. “We’re not about controlling how people do business. Our job is to make sure our customers are well taken care of.”

Montgomery County is the most populous jurisdiction in Maryland, and the only one that directly controls the wholesale distribution of all alcohol in its borders — a vestige dating to the end of Prohibition.

Businesses that purchase alcohol must buy it from the county, not private wholesalers. In addition, while beer and wine can be sold at retail establishments, consumers can buy liquor only from a county-owned retail store.

The system has long been criticized for, among other things, its past poor performance in deliveries, ordering and reliability...

Read the rest here.

 

 

Maryland Comptroller Comes Out in Support of Grocery Store Beer Sales

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We've been following Maryland's beer reform debate over the past year, which culminated in a legislative reform package proposed by Maryland Comptroller Peter Franchot's task force. Franchot has been an outspoken advocate for overhauling Maryland's outdated beer laws, although some state lawmakers have been resistant to his ideas. In recent comments to the Baltimore Business Journal, Franchot added to his reform ideas by speaking out in favor of Maryland groceries being allowed to sell beer:

Comptroller Peter Franchot wants Maryland to join a majority of the U.S. and allow beer and wine sales in all grocery stores, marking a reversal from a previous stance he had on the issue as recently as last fall.

The Democratic comptroller said in an interview this week with the Business Journal that the move to legalize alcohol sales in supermarkets would "provide a shot in the arm" to local craft brewers, an industry he has been seeking to reform for more than a year...

Read more here: https://www.bizjournals.com/baltimore/news/2018/05/23/franchot-reverses-position-wants-alcohol-sales-in.html

Don't Expect Private Liquor Stores in Maryland's Montgomery County Anytime Soon

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Maryland's Montgomery County's government-run liquor stores are notorious (see R Street VP Kevin Kosar's take on Montgomery County booze sales here). Last year, however, the state legislature granted the county the ability to license privately-owned liquor stores. But according to Bethesda Magazine, county liquor regulators remain noncommittal about when (and even if) such licenses will be granted:

The Montgomery County Department of Liquor Control’s director said this week the department hasn’t set a timeline or established a policy to begin licensing privately owned beer and wine stores in the county to sell liquor.

The DLC has had the ability to license the privately owned stores to sell spirits for more than a year.

If implemented, such a policy could change the county’s long-held monopoly on the retail sale of liquor at its 27 government-run retail stores, which are the only locations where residents and others can buy spirits such as whiskey, vodka and rum in the county.

Hundreds of privately owned beer and wine store owners could potentially apply for spirits licenses if the county created a policy for them to do so. However, Dorfman said any new policy would likely not permit a privately owned store that wants to sell liquor to operate within five miles of a county liquor store...

Read the rest here.

 

Maryland Legislature Strikes Back Against Reform Advocate

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Maryland Comptroller Peter Franchot has led a well-publicized crusade against Maryland's outdated beer laws--a fight which has endeared him to much of the craft beer community but not to some state legislators. The Maryland legislature is now considering stripping Franchot's office of its power to regulate alcohol in the state as retribution for his reform advocacy:

The Maryland Senate on Wednesday approved a plan to study whether Comptroller Peter Franchot should continue to regulate the state’s alcohol industry — legislation inspired by a fight over beer policy between lawmakers and the Democratic comptroller.

Without discussion, the chamber voted 42-3 to create a task force to examine whether the comptroller’s office “is the most appropriate agency to ensure the safety and welfare of the residents of Maryland.” The House of Delegates approved the measure earlier this month, after rejecting a proposal by Franchot to eliminate many restrictions that craft brewers say are slowing their industry’s growth.

The passage is the latest blow in a yearlong battle over Maryland’s system of alcohol regulation, which dates to Prohibition and has established, powerful forces in Annapolis...

More here

Latest Effort to Reform Maryland Beer Laws Ends With a Whimper

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Maryland has been ground zero for a heavily contested battle over beer laws, pitting craft brewers against distributors and other vested interests in the state. Last year, in the wake of the controversial "beer bill" (HB 1283), a task force was convened to study the state's beer laws and suggest changes. The task force, which was spearheaded by Maryland Comptroller Peter Franchot, unveiled a sweeping legislative package earlier this year that would have significantly liberalized Maryland's beer laws. Alas, according to the Baltimore Sun, the task force's proposed legislation has been killed in committee:

The hopes of Maryland’s craft brewers for sweeping changes to the state’s beer laws flattened Friday like an open beer left out too long as a legislative committee rejected Comptroller Peter Franchot’s “Reform on Tap” initiative.

Unhappy with Franchot’s bold venture into policymaking, a House committee voted 17-4 against a bill the Democratic comptroller had been pushing for months as the best way to fix what he viewed as flawed beer regulations approved last year by the General Assembly.

The panel then compounded the repudiation by passing a measure seeking to examine whether the comptroller’s office should retain its role as the state’s alcohol regulator.

Franchot’s proposal sought to lift various restrictions on Maryland’s brewers, including curbs on the amount of beer they can make and sell directly to the public. While the limits rankled the state’s burgeoning craft brewing industry, other sectors of the alcoholic beverage industry defended the regulations.

Franchot issued a statement calling the rejection of Reform on Tap “more business as usual in Annapolis.”

“The corporate beer lobbyists did their job and got their money’s worth,” he said. “Our independent craft brewers ... have once again received the message that our state’s leaders are fundamentally hostile to their line of work.”

Read more here.

 

Here We Go Again: Maryland Legislator Introduces Bill to Limit Brewery Taproom Sales

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Maryland was the scene of an ugly battle over craft beer legislation last year, and the political climate does not appear to be getting any better. A controversial beer bill, HB 1283, was eventually modified to allow breweries in the state to sell 2,000 barrels annually in their taprooms. While brewers in the state were hopeful that this limit would be increased even more in the future--as proposed by Maryland's "Reform on Tap" task force which conducted a review of the state's beer laws--it appears some lawmakers want to move in the opposite direction. The Baltimore Sun reports:

"A bill introduced by Maryland Dels. Talmadge Branch and Dereck Davis seeks to roll back how much beer small breweries in Maryland can serve in their taprooms while allowing larger facilities, such as the one being built in Baltimore County by Guinness, to maintain existing limits.

House Bill 1052 calls for reducing annual limits from the existing 2,000 barrels to 500 barrels at small breweries while allowing large facilities to continue to sell 2,000 barrels of beer — which equates to about 1,800 glasses of beer a day.

Maryland Comptroller Peter Franchot, who has proposed legislation to lift all limits, immediately opposed the bill...

Franchot wrote that his legislation, the Reform on Tap Act of 2018, “will eliminate the arbitrary limits and change the laws that benefit corporate beer monopolies at the expense of our local, independent craft brewers.” His reform bill emerged from a task force he put together last year.

He said his bill and the one introduced by Branch and Davis will be heard on the same day in Annapolis — Feb. 23..."

Read the rest here.

Following the Money in Maryland Beer Politics

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Maryland has been at the forefront of beer reform news given its passage of the controversial HB 1283 beer bill last year (which was criticized by many craft brewers), as well as a newly-proposed reform package that would substantially liberalize the state's beer laws. Many reform advocates are cautious about the new bill's chances of passage, however, given past experiences of stalled reform efforts in the state. Liz Murphy of Naptown Pint has been extensively covering the Maryland beer and politics scene, and her latest article traces the money in Maryland beer politics--particularly for the key state legislators who seem most resistant to reforming the state's beer laws:

"There is one question I got asked following last year’s legislative embarrassment around House Bill 1283 more often than anything else — either packaged directly as such, or as an inquisitive or snarky aside:

What happens when you “follow the money” in Maryland politics and the brewing industry?

It’s a topic I’ve researched periodically, but it’s always been one I’ve approached with an overabundance of caution...

As I mentioned at the start of this, campaign contributions can be a tricky topic, because the “why” behind a contribution is not explained in these records — only the fact that these contributions exist.

That said, the presence of these contributions makes it difficult to take the claims of above-board legislative dealings at face value.

Because while Maryland brewers have recently formed their own PAC to begin contributing to candidates that support their cause, at the time events surrounding HB 1283 began to unfold, Maryland brewers seem to [be] the only party not donating any money.

Yet they somehow are also the only ones being targeted with punitive legislation, as well as combative posturing and demeaning comparisons to children."

The entire article is well worth a read.

Maryland Comptroller's Much-Awaited Beer Reform Proposal Unveiled

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DrinksReform.org has been closely tracking the debate over beer laws in Maryland, including the recent findings of a state task force headed by Comptroller Peter Franchot. According to the Baltimore Sun, the comptroller's office has now officially unveiled a legislative reform proposal that would eliminate restrictive state beer regulations like the limit on taproom brewery sales:

"Maryland Comptroller Peter Franchot unveiled a legislative package Monday that would make sweeping changes to the state’s regulation of craft breweries.

Franchot’s 12-point 'Reform on Tap Act of 2018' would eliminate limits on sales from taprooms and for take-home consumption for the state’s breweries. It also would eliminate limits on beer production for breweries that faced caps and let localities set taproom hours.

The proposal is intended to do away with regulations Franchot said have stifled one of the state’s most promising economic engines...

 

The proposal would follow legislation approved earlier this year that quadrupled the amount of beer breweries can serve — up to 2,000 barrels, or close to 500,000 pints. The legislation, designed to pave the way for a new Guinness brewery and taproom in Baltimore County, also stipulated that breweries could serve an additional 1,000 barrels if they sold the beer to a wholesaler, then bought it back, and limited operating hours for new taprooms. Micro-breweries attached to restaurants can serve up to 4,000 barrels on-site.

Franchot’s proposal could set up lawmakers for another lengthy debate about breweries for a second consecutive year..."

Read the whole article here.

Greg Parnas of DCBeer.com, who has been covering the Maryland beer reform efforts extensively, describes the legislation as "an impressive set of reforms that would fundamentally change the legal landscape for breweries operating in Maryland" and make it "among the most brewery-friendly states in the country from a regulatory standpoint." 

Earlier this year, R Street's Jarrett Dieterle interviewed Jim Caruso, CEO of Maryland's Flying Dog Brewery, about the state of beer laws in Maryland.