Franchot looks to reform alcohol laws

The state comptroller said Tuesday he is starting an alcohol task force to review state laws because the state is more “restrictive” on craft breweries than every other state in the country.

Maryland Comptroller Peter Franchot said he wants to see reform in Maryland alcohol laws. He said the task force, called Reform on Tap, will meet at breweries across the state and discuss concerns about existing laws as well as ideas for new legislation to propose to the General Assembly. Stakeholders such as breweries would make up the task force.

After a series of meetings, the task force would send the structure of a bill to the General Assembly in October, Franchot said. The meetings would be free, but attendees would be welcome to purchase beverages from the brewery that happened to be hosting the meeting. He said the meetings would be open to the public and to all media.

He said laws in Maryland would discourage people interested in opening breweries from locating their business in the state.

Everyone should support breweries, Franchot said.

“Generally, people that age (18 to 20) went to public school in Maryland and without any active business growth in the state of Maryland there’s no growth in schools,” Franchot said. “If you’re pro-education you should be pro- business.”

Del. Charles Barkley (D-39), a sponsor of the bill, said he wasn’t sure whether existing laws discourage potential brewery owners from opening business in the state.

“That’s really hard to say because it does take a big investment to get started,” Barkley said. “I still think people are going to come here and build breweries.”

Franchot said he believed the bill the General Assembly passed at the most recent legislative session, including House Bill 1283 will be harmful to brewery owners.

The bill would limit the hours new breweries could operate, and the breweries would still have a limit on how much their own alcohol they could sell before they had to turn over the rest to an alcohol distributer or wholesaler.

Franchot said he didn’t want craft breweries to have to buy back their beer from a distributor.

Montgomery County Department of Liquor Control is an alcohol distributor for much of the alcohol sold in the county. A couple of years ago Franchot and Del. Bill Frick (D-16) suggested and proposed legislation to partially privatize alcohol distribution. Had it been completely privatized, the county would have lost millions of dollars in income.

“As you know I am not a support of the county being in the liquor business,” Franchot said.  “If the county is ... distributor under the law, then yes, that (changing distributor-related laws) would affect them.”

However, he said reforming liquor laws was separate from his thoughts about the Department of Liquor Control.

Barkley said he believed the passed version of the bill was more favorable than Franchot said.

“I don’t completely agree with that,” Barkley said. “I thought there was a lot of good amendments put in the bill... that we accepted.”

He said that while he was not happy with the original bill, of which he was a sponsor, he was pleased with the amendments that the General Assembly approved including grandfathering breweries with class 5 licenses, and changing the amount by which the bill would reduce hours of service.

The original bill proposed that breweries under a specific license be reduced to being open from 10 a.m. to 9 p.m. on weekdays and 10 a.m. to 10 p.m. on weekends, Barkley said, but it was amended in the State Senate and accepted in the House of Delegates to change the hours to 10 a.m. to 10 p.m. all week.

“I think it (the amendments made) made it much better for the breweries,” Barkley said.

He said he couldn’t comment on the task force because he was not familiar with how it would work. However, Barkley said HB 1283 was in line with state alcohol laws.

Franchot said the new bill as well as current state laws are considerably more restrictive on brewery sales. His goal for Reform on Tap is to reduce the number of regulations on craft breweries as much as possible.

Under HB 1283, breweries could sell up to 2,000 barrels of beer, turn the rest over to a wholesaler, and then buy it back to sell more. The craft brewery could also apply for permission to sell an additional 1,000 barrels.

Franchot described his distaste for the system.

“If that isn’t the most... waste of time and money,” Franchot said, “Why not just ask them to give a check to the distributors?”

He said he didn’t care for the extra measure to sell the full 3,000 barrels. 

“If you want to serve the extra 1,000 you have go and do this ridiculous kabuki theater with the distributor,” Franchot said.

Barkley said a brewery buying beer from a distributor after a certain amount was the way alcohol is distributed in the state before the House passed the bill.



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