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Star Democrat: Franchot visits RAR to support craft beer reform

December 19, 2017

CAMBRIDGE — Comptroller Peter Franchot visited Cambridge’s RAR Brewing on Friday, Dec. 15, to rally support for the Reform on Tap Act of 2018, meant to lift restrictions that were placed on craft breweries in Maryland with the passing of House Bill 1283.


As chief regulator of alcohol for the state, Franchot is a fervent supporter of the booming craft beer industry. He noted that this sector of Maryland’s economy, which includes more than 6,500 jobs, is fast approaching $1 billion in economic activity. It is expected to grow into a $4-5 billion industry over the next several years.


The legislation was developed through the Franchot’s Reform on Tap Task Force, which was comprised of stakeholders throughout Maryland, such as brewers, distributors, retailers, consumers and lawmakers from both sides of the aisle.


“We came up with the idea that the craft brewing sector could be the ‘manufacturing sector of the future,’” Franchot said. “We also thought that we could make Maryland the No. 1 state in the country to welcome, appreciate, partner with, and promote craft beer.”


The task force held eight public and two town hall meetings “to get a better grasp of the state’s current laws and the challenges and opportunities that lie ahead for craft brewers,” according to Comptroller Franchot’s website. A final report of the findings from these gatherings was prepared by the Office of the Comptroller.


Demand for craft beer was obvious considering the lengths to which consumers went on Saturday, Dec. 16, at RAR Brewing and another local brewery, Burley Oak in Berlin, for special releases of new beers.


Beginning at 8 a.m. at Burley Oak, more than 200 people lined up and waited outside in freezing weather to ensure their opportunity to buy four new beers being released that day at 11 a.m.
RAR Brewing recently started an online reservation system for releases, which somewhat reduces the need for long waits, but only limited quantities are available to be reserved on a first-come, first-served basis. Those who miss the online pre-sale must still arrive early in the morning to grab a spot in line.


Generally, breweries hold these special events about once each month, and also offer other merchandise for sale, such as special glassware, T-shirts and more. People come from all over the Eastern Shore, and even from across the Bay Bridge, to buy beer and other goods from our local breweries.


“There are a hundred communities in Maryland that would give their right arm to have RAR, because it’s a magnet,” Franchot said. “People come, they travel, because they love the product. They spend money at other establishments.”


The comptroller’s official website calls the laws and regulations placed on the craft beer industry in Maryland antiquated, burdensome and arbitrary. Franchot’s proposed legislation will make several key changes to the law in an effort to promote growth in the industry, rather than stifle it.
“We’re going to free the craft beer industry to do what they’re good at,” he said.


It will repeal limits on Class 5 or Class 7 taproom sales, take-home sales, production of beer, and there will be no tour or special event requirements for Class 5 take-home sales.


Currently, Class 5 breweries, such as Eastern Shore Brewing in St. Michaels, are only allowed to sell 2,000 barrels of their own beer in their taproom annually. They may sell another 1,000 barrels under the “buy-back” provision, meaning they must sell their own beer to a distributor, which then has to be transported to the distributor’s warehouse, unloaded, loaded back up, and sold back to the brewery at a marked-up price before it can be sold to consumers in the taproom.


The limit for Class 7 breweries, such as RAR and Burley Oak, is 4,000 barrels annually.


A repeal of the “buy-back” provision for Class 5 taproom sales is also included in the legislation.
Hours of operation for Class 5 breweries are currently limited to between 10 a.m. and 10 p.m.

 

The legislation would allow those operating hours to be determined by local governments.


Class 5 brewers will, under the new law, be able to obtain a Class B or Class D license upon request, which concerns under what circumstances licensed businesses are allowed to sell alcoholic beverages. Currently, local jurisdictions may deny this license to a brewery.


Other changes include: brewers producing fewer than 300,000 barrels of beer annually would no longer be subject to franchise laws and would be permitted unlimited self-distribution, contract brewing would be permitted without restrictions for breweries producing at least 50 barrels annually, taproom sale restrictions on contract-brewed beer would be lifted, and a two-year provisional license for start-up brewers contracting beer would be established.


“If we get this passed, particularly the franchise revision, Maryland will be seen not as one of the worst states, but one of the best states in which to start a craft beer company,” Franchot said. “We’re excited about the fact that this has gone from an idea to legislation.”


RAR Brewing co-founder J.T. Merryweather thanked Franchot for taking initiative and working hard to propel Maryland’s beer industry forward.


Franchot said that the goal is to build a Maryland’s reputation as a state that is friendly to beer and small business of all types.


In order to show the public support for this legislation, Franchot has introduced a statewide petition with a goal of collecting 6,541 signatures — the number of jobs supported by Maryland’s craft beer industry — by February 1, 2018.


A link to the online version of the petition can be found through the Reform on Tap Task Force Facebook page or on the Office of the Comptroller’s website, www.marylandtaxes.gov, under Comptroller’s Initiatives.

 

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