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Good Beer Hunting: WTF, MD? — Misunderstandings, Potential Bias Could Impact Beer’s Future in Maryla

“Prohibition.”

Multiple times—and independent of each other—this dirty word of the alcohol industry has been muttered half-jokingly when discussing the latest round of Maryland’s awkward fight over laws and regulation. On the record and off, people within the industry tell GBH they’d never assume some kind of neo-temperance movement to actually take hold, but the sheer fact is that that’s the context of which people are talking about what’s going on in the Old Line State.

“It’s crazy to even be talking about it, but I think it’s coming up in my mind and others because if you watch videos of meetings and read about it, that’s what they’re talking about,” says Adam Benesch, co-founder and director of operations for Baltimore's Union Brewing and an at-large board member of the Brewers Association of Maryland. "I don't think those words have ever been spoken on the record in a public legislative meeting and I don't think they're going to be voting on prohibition, but there is a story being created where how alcohol is regulated and operates in Maryland could be facing significant changes."

ADDING IT UP

At the center of this thought process is the “Task Force to Study State Alcohol Regulation, Enforcement, Safety and Public Health,” the second such group to be formed in as many years in Maryland to delve into alcohol use, laws—and from the perspective of those in the “small and independent” beer camp—the craft brewing industry alone. It’s a follow-up to State Comptroller Peter Franchot’s 2017 Reform on Tap task force, which worked to create legislation that early this year became the Reform on Tap Act, a bill that would’ve allowed breweries to sell as much beer from their taprooms as possible as well as adjusted franchise laws to provide a path for breweries to end partnerships with distributors.

Ultimately, the state’s House lawmakers shot it down in March 2018. As noted by the Annapolis Capital Gazette’s Liz Murphy, there were five other bills that also were ended by that same House committee.

In a recent episode of the Good Beer Hunting podcast, Franchot lamented the outcome, noting that he’s come to see craft beer as a manufacturing industry of the future that drives localized economic development and offers a “synergistic ability to strengthen community.” It’s just that his political colleagues don’t have the same point of view.

“My impression was that any normal state would roll the red carpet out for craft beer, and what I found was that most states—a lot of states—do not,” Franchot told host GBH founder Michael Kiser. “Including Maryland, my own state. We roll out a black carpet that says, ‘We don’t like you, we don’t want you here.’”

In the end, the only bill related to beer to actually pass was House Bill 1316, which called for the creation of this new task force. The legislation was co-sponsored by Delegates Warren Miller and Benjamin Kramer, the latter of which participates in the new group.

Among all the political strife that has brought the state to this moment in time, there is agreement on two cornerstones of what this new task force is hoping to discuss, debate, and analyze. The 20-member task force will both consider powers bestowed on State Comptroller Peter Franchot, who oversees alcohol regulation, and aspects of public health as it relates to alcohol use and abuse. Attorney and former state legislator Bruce Poole, who is chair of the task force, tells GBH that there is particular worry of underage alcohol consumption, especially based off of numbers shared by the Centers for Disease Control (CDC) that say 11% of all alcohol consumed in the United States is done by children and teens aged 12 to 20. That statistic is somewhat misleading, however, as it’s based on a 2005 study for the Office of Juvenile Justice and Delinquency Prevention’s Underage Drinking Enforcement Training Center. It’s also based on numbers from 2002.

In reality, binge drinking among youth has reportedly been declining. In 2015, Time wrote that the Substance Abuse and Mental Health Services Administration showed the percentage of underage people who drink fell between 2002 and 2013, from 28.8% to 22.7%. Then in 2017, the New York Times cited a study that showed “frequent binge drinking”—at least two occasions of five or more drinks in a row over a two-week period—”decreased among American adolescents over the period from 1991 to 2015.”

Even in beer-focused media, concern over declining drinking rates among young, legal-age consumers has been widely reported, including particular concern for the next generation of drinkers who show increased attention to aspects of health and wellness. Author Jeff Alworth pondered the decline of consumption in August. MillerCoors has planned multiple low-calorie, low-carb, and low-ABV brands with the specific intent of offering younger drinkers what they want as they shift toward healthier options. There’s even a growing chorus of people that see non-alcoholic beer as a strong market in the U.S.

According to a paper published in the most recent issue of the Journal of Wine Economics, the overall per capita ethanol consumption from beer for U.S. adults has stayed flat or gone down, depending on what year is picked as a starting point, since 1972. Wine has been flat, and only spirits has seen an increase, with additional consumption projected through 2022. The finding is made a bit more awkward for Maryland, which was one of 16 states (plus the District of Columbia) that had above average and increasing consumption of spirits. Maryland's neighbors in DC and Delaware were both cited for above average and increasing consumption of beer, and Delaware was the only state to be cited in all three of beer, wine, and spirits.

The findings don’t align with initial considerations that beer is a root of problems for underage drinking, especially considering projections for four years out, which would include the youngest and soon-to-be-legal-age drinkers. Even more so, additional numbers don’t show Maryland with an outbreak of underage consumption.

According to 2017 figures reported by the CDC, Maryland’s 12-to-20-year-olds who have reported to have ever had at least one drink of alcohol rank 26th out of 29 states that reported to the nation's health protection agency, only polling worse than Maine, Rhode Island, and Utah. With regards to binge drinking, however, 13% of Maryland teens admitted to the act, defined as four or more drinks of alcohol in a row if female or five or more drinks of alcohol in a row if male, within a couple of hours, on at least one day during the 30 days before a survey. That puts the state 20th out of 36 states to report data, roughly smack dab on the national average of 13.1%. When it comes to illegal, underage drinking, there’s always room for improvement, but in terms of statewide problems, numbers may not indicate the dire need for drastic overhauls, especially if national trends of declining rates were to apply moving forward.

But this is just related to youth. It doesn’t consider the broader issue of declining alcohol consumption globally, which one data and market intelligence company believes is happening because of falling beer sales in the U.S.

Poole noted that, while alcohol content of the country’s best selling beers like Bud Light (4.2%) is low, “a lot of craft beers are now at 7%, 9%, and some of them are in excess of 10%, and yet in particular, young people don’t get what the impact of that is.” In 2014, the only time the figure has been analyzed and reported, the Brewers Association found that the average ABV of its craft brewer members was 5.9%, a number taken well before an ongoing proliferation of lower calorie (and lower ABV) and “easy drinking” options that have flooded shelves from craft brewers. Poole noted the existence of the website getdrunknotfat.com as an example of ways young drinkers are considering methods to maximize inebriation, but according to Alexa web analytics, the site is the 64,567-ranked site in the U.S. (as of Oct. 8) weighted by pageviews and overall traffic. As comparison, people spend about a minute more on the advice site Quora.com, typically around the 50th most popular site in the country, according to Alexa, than getdrunknotfat.com, practically an eternity in Internet experience.

Poole also cited a study released this summer in the British Medical Journal that showed morality by liver disease increased the most among 25-to-34-year-olds from 2009-16, driven by by alcohol-related liver disease. Heavy drinking is seen to be the factor, but the cause for that behavior, according to the study's authors, also correlates with the global financial crisis as well as other societal factors, like care for young veterans.

Still, the rapid increase in the number of alcohol brands and sites where alcohol is available is something that Poole says is front of mind, noting that the rising number of breweries and wineries where bottles or cans can be sold on site has “dramatically increased.”

“I don’t know that it means that alcohol is, in fact, any more accessible to minors, for instance,” Poole says. “My guess is that taphouses and wineries are places where the people selling are pretty darn cautious, so their population [of customers] is not going to be underage drinkers.”

But it’s this kind of rhetoric that has brewers worried. Formed in 2017, the first iteration of an interdisciplinary group focused on alcohol was Comptroller Peter Franchot's "Reform on Tap" task force. That 40-person roster included 17 brewery representatives, as well as assorted community members like in-state journalists and someone from the Maryland Tourism Coalition. There were also nine politicians or officials, and four members that were distributors and retailers.

This time around, the 20-person group includes seven each of officials and unaffiliated community members, mostly representing public health. There are two brewery representatives and one person from a winery, two retailers and one distributor.

In multiple conversations, people in-and-around the beer industry mentioned to GBH that the formation of the Task Force to Study State Alcohol Regulation, Enforcement, Safety and Public Health seemed to be a focused dig at Franchot, who has made plenty of political enemies in his decades in office. (You can see past GBH coverage here, here, here, here, and here.) He admitted as much on the GBH podcast, saying that pushback from his attempt to modernize alcohol laws came from politicians who are “completely owned lock, stock, and barrel by the beer distributors.”

“This is not something unique to Democrats,” he continued. “The Republicans are too, and they all claim they’re for small business and free enterprise, and it’s a lot of nonsense. They aren’t.”

The assumed influence of these companies, combined with the makeup and background of this new task force is also causing worry. “The entire task force reeks of conflict of interest,” Union’s Adam Benesch tells GBH.

MUDDLED MOTIVATIONS

Examples of potential conflicts range from tangential to direct.

Ismael “Vince” Canales, for instance, is the state lodge president of the Maryland Fraternal Order of Police. According to reporting from the Washington Post, he is one of many lawmakers, executives, former DEA agents, and more positioning to make a splash in the state’s legal medical-marijuana market. Canales was found to be both an investor and head of security for Holistic Industries LLC, but is not listed on the company’s “team” page. Josh Genderson, president and CEO of Holistic Industries, also has a former head of the D.C. police union on staff as part of security, according to the Post.

Canales would seem a valuable voice for the new task force from the standpoint of law enforcement and public health, and as shown in studies and other media coverage, availability of marijuana has potential to lower the rate of alcohol consumption. Should increased alcohol taxes and regulation be suggested by the task force, it would seem feasible that those moves might benefit the state’s nascent cannabis industry.

When it comes to elected officials and those advocating for policy, potential problems with their involvement run deeper. State Delegate Benjamin Kramer, representative of District 19, and a real estate business owner, has directly benefited from the Department of Liquor Control. In 2016, Bethesda Magazine revealed that Kramer, who at the time was defending Montgomery County’s Department of Liquor Control, was receiving more than $20,000 a month in lease payments for a retail store overseen by the department. From 2003-2015, the outlet reported Kramer and the co-owner in his business, his sister, Rona, received $2.56 million in lease payments. The business also was in line to earn another $2.7 million under a lease renewal through 2025.

In his defense, Kramer has said he repeatedly receives clearance from state ethics advisors regarding this potential conflict of interest, according to reporting from MarylandMatters.org.

Raimee Eck, president of the Maryland Public Health Association and a member of the task force, was one of two public health officials who presented at the task force's first meeting on Sept. 12. In 2017, she published an op-ed in the Baltimore Sun directly questioning Franchot's Reform on Tap task force, noting a lack of public health input. Alcohol-related deaths in Maryland had been rising in recent years, she noted in her piece and again this month at the meeting, including a large jump from 310 to 582 in 2015-2016, according to the Maryland Department of Health.

Beer is something that is enjoyed by many, she wrote in her op-ed, but "is also an addictive drug and a toxin needing appropriate controls to create a healthy marketplace."

What she didn’t disclose regarding the sudden increase of alcohol-related deaths was that the Department of Health clearly states in its reporting that the most rapid increase of deaths took place among those 55 years old and above, which had also been stated in the previous year’s report. While she wouldn’t have known at the time, this demographic clashes directly with the new task force’s stated intention of underage alcohol abuse.

In addition, the near-doubling of alcohol-related deaths is also clearly correlated by the Department of Health to an epidemic of fentanyl and prescription opioid use in Maryland which has become such a problem that the DEA has created new strategies to deal with it. The agency’s focus is on Baltimore City and County, which geographically accounted for slightly more than half of alcohol-related deaths reported by Maryland’s Department of Health in 2016.

From 2015-2016, a significant increase that led to 582 statewide, alcohol-related deaths took place when a person drank in combination with heavy drugs, led by heroin (316), fentanyl (289) and prescription opioids (111). Because multiple drugs could have been taken while consuming alcohol, figures exceed the total death number. Fentanyl, a narcotic used to treat pain, saw a 338% jump in number of deaths in combination with alcohol consumption from 2015-2016. Prescription opioids grew 102% while cocaine (109%) and heroin (76%) also saw significant increases from the previous year.

In September, Carly Ogden, co-owner of Frederick’s Attaboy Beer and a member of the Reform on Tap task force, spoke to Herald-Mail Media, hoping for fairness from the new group. “But I'm not sure it's a great use of the taxpayers money,” she told the outlet, which also added that she wondered if “dealing with the state's opioid problems might be a better use of time.”

The process—especially related to public health concerns that are real but have also been stated in misleading terms by those speaking about them—may be deliberate. David Jernigan, a public health researcher with appointments at Johns Hopkins and Boston University is one of the alcohol policy experts on the new task force and presented at the group’s first meeting. He’s also a co-founder of Marin Institute for the Prevention of Alcohol and Other Drug Problems, a group now known as Alcohol Justice, and is referred to by some as supporting a neo-temperance movement. Among its list of accomplishments and goals, Alcohol Justice calls for increased taxes and regulation to fight “against the alcohol industry’s harmful practices.”

In his own research and that of the Marin Institute, Jernigan has outlined how successful policy battles can be won, notably through news media as a way to publicize negative public health aspects of alcohol and keep issues front-of-mind for citizens. While Jernigan was associate director of the Marin Institute overseeing its efforts on policy implantation and “surveillance” (phrases used on his LinkedIn profile), he co-authored, and the Institute supported, a 1993 book, Media Advocacy and Public Health: Power for Prevention. The publication describes its purpose as moving "beyond frustration" with the American mass media to offer a "prescription" on how "new media can better be made to serve the greater community interest in social justice, especially the public's health." Among its mentions of Marin, the book highlights how the Institute was successful of getting a “neutral” talk show host—“neutral” being the authors’ own word choice—to use its talking points during a debate.

Jernigan, who has a PhD in sociology and not medicine, openly refers to himself as an “advocate” when it comes to alcohol regulation and policy. In a 2011 interview on Johns Hopkins’ On the Inside podcast, he said that he’s “fairly skeptical of pure objectivity in science and certainly in my own field.”

Jernigan did not respond to GBH’s messages asking for comment for this story.

“What I understand is that science is easily politicized, and in particular, it’s politicized by the research questions that people ask,” he continued on the Johns Hopkins podcast. “My research questions have always been driven by what the policy opportunities are in the moment or what policy opportunities I can promote by doing research that will support people being able to make change.”

To that end, Jernigan went on to note his involvement in a 2011 Maryland law change that increased taxes on alcohol by 3%, the state’s first increase for distilled spirits since 1955 and beer and wine since 1972. His own research, for which he has since intimated he is a subjective advocate to some degree, went on to show that alcohol sales were reduced because of the tax.

“Maryland’s experience with raising its alcohol sales tax is a powerful case study,” he said at the time. “The potential public health benefit of increasing alcohol sales taxes as a strategy for reducing excessive drinking in states across the country is considerable.”

However, in the paper, “Alcohol Consumption in the United States: Past, Present, and Future Trends,” its authors suggest drawing that kind of direct line may not be so easy. In their analysis, researchers share that in real terms, state alcohol excise taxes across the country have fallen since 1991, with wine (27%), beer (30%), and spirits (32%) showing substantial declines. “This decrease in the real tax rate means that real prices are falling, and hence consumption should rise,” they write (note the use of “should”), which hasn’t been the case.

In the interview with On the Record, Jernigan said the expectation for the 2011 tax increase was to cause enough change to prevent 6,500 cases of alcohol abuse or dependency, save 14 lives annually, and prevent violent assaults. Those estimates, he noted, were specifically to showcase potential to politicians.

“This was powerful public health data that the advocates—frankly, including me—were able to use in conversations with legislators to help them stay on track in the very difficult political process that happens when you try to do a tax increase, particularly in a recessionary climate,” he said.

Jernigan’s continued place among policymakers has some worried. In a Baltimore Sun op-ed from last year, Michelle Minton, a fellow at the Libertarian Competitive Enterprise Institute, wrote that Jernigan’s work “has been funded by nearly $8 million in grants from the National Institute on Alcohol Abuse and Alcoholism, part of the National Institutes of Health, since 2009.” The National Institute on Alcohol Abuse and Alcoholism is also the source of the 16-year-old statistic cited by Poole that 12-to-20-year-olds are responsible for 11% of the nation’s alcohol consumption.

At the task force’s initial meeting on Sept. 12, Jernigan stated that “alcohol regulation isn't working,” according to the Maryland Matters blog, which also noted that comments by Jernigan suggested the thousands of alcohol-impaired motor vehicle fatalities that take place annually “should be argument for why this product is regulated differently than other products.”

IN THE CROSSHAIRS

For now, the task force is working toward a proposed timeline of issuing a report at the start of December. Poole tells GBH that three remaining meetings will include a collection of two or three panels each, along with presentations, to collect testimony to represent various groups and points of views. Regulators, alcohol industry professionals, health experts, and more are all on an invite list, Poole says.

“We’re looking for as much information as possible from valid points of view and then [we’ll] come up with our findings,” he adds.

For what it’s worth, the Brewers Association of Maryland isn’t exactly buying it. In a statement to GBH, Jim Bauckman, communications manager for Grow & Fortify, a firm that supports the Association, says that there’s a need to modernize alcohol laws, but the effort should focus on the importance and value of supporting local manufacturing businesses. There’s hope for a “serious discussion” regarding health issues, but “singling out only Maryland manufacturers with restrictions and limits is, in our view, not about public health but is instead about economic protectionism.”

As with other attempts at updating legislation, an implication of what this new task force is focusing on—manufacturers—ignores what could reverberate from impacting only those who make alcoholic products. If distribution and retail aspects were to be ignored, a whole host of secondary actions could become a factor. If Maryland brewers are reigned in, for example, what would become of out-of-state brands who might have increased power with distributors or retail locations?

Franchot says that there’s a roughly 50-50 split between beer made and sold in Maryland versus out-of-state products. With changes to laws, the state government should embrace the opportunity to skew that number heavier toward its own constituents.

“Local beer helps the economy and also has the added value of being a far superior product,” he said.

It’s not lost on the greater collection of Maryland brewers, either.

“The Brewers Association of Maryland understands the serious responsibility that comes with manufacturing and selling an alcoholic beverage, and we take that responsibility very seriously,” Bauckman tells GBH. “However, laws that only limit sales at manufacturing facilities and do not limit sales at the thousands of other businesses that sell alcoholic beverages in Maryland and do not appear to be about protecting the public health.”

Speaking on his own behalf, Union Brewing’s Adam Benesch, an at-large member of the Association’s board, admits to GBH that he believes anything that comes out of the task force “will likely not be favorable to craft brewers.”

“We get into this business because we love beer and love our communities and state,” Benesch says. “The thought that this is so tied to politics is weird.”

What is left to specifically address is the man who may or may not be the catalyst behind the formation of the Task Force to Study State Alcohol Regulation, Enforcement, Safety and Public Health: Peter Franchot.

Poole and others have said directly that there is an overarching question of whether Franchot should be allowed to have oversight on alcohol laws, but nobody has offered up an idea of what it would mean if those powers were transferred elsewhere, to law enforcement or legislators. Regardless of what the recommendation might be, there are still questions of budgeting, training, or even additional staffing that might be needed to shift responsibilities around.

In a statement to Herald-Mail Media, Franchot said that his staff already do an “exceptional job” to enforce tax collection, protect underage drinkers, and help small businesses grow.

“But judging by the first meeting, the task force actually seems more focused on attacking me personally, and not evaluating the great work of the Field Enforcement Division," he told the publication. "More concerning to consumers and small businesses is the task force’s consideration of broader policy changes like raising the state’s 9% alcohol tax, establishing a government-run alcohol monopoly, or, incredibly, outright prohibition. If I were an alcohol producer, distributor, retailer, and consumer in Maryland, I’d be very anxious about the direction that this task force is headed.”

Amidst the misunderstandings, conflicts of interest, and the many conversations yet to come, only one thing is for certain: the direction of Maryland beer is not clearly forward.

https://www.goodbeerhunting.com/blog/2018/10/8/wtf-md-misunderstandings-potential-bias-could-impact-beers-future-in-maryland

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