The craft beer industry in Maryland is booming. In 2012, there were 10 breweries employing 134 workers in the state. Five years later, according to the Bureau of Labor Statistics, there were 43 breweries employing 450 workers. Between 2012 and 2016, employment grew by 236 percent, making this one of the fastest growing manufacturing sectors of Maryland’s economy. This is great news for local beer lovers who now have more choices than ever. It’s also great news for Maryland’s economy. According to a 2017 study by the Maryland Bureau of Revenue Estimates, the craft brewing industry in Maryland supported 6,541 jobs in 2016 and had a total impact of over $637 million.
Despite this growth, Maryland’s craft beer industry lags behind our neighbors, as seen in the table below, sourced from the National Brewers Association.
Key Craft Beer Statistics for States in the Mid Atlantic Region
|State||Economic Impact Per Capita||Craft Breweries Per 100,000 Adults|
Source: National Brewers Association
Maryland’s craft beer industry is smaller than in other states in our region and there’s room for it to grow. According to the 2017 Maryland Bureau of Revenue Estimates report, Marylanders consume 28,000 more barrels of craft beer than we produce, while other states in the Mid-Atlantic have much smaller gaps. The industry is continuing to expand. For example, Suspended Brewing in Baltimore City just announced a grand opening date of March 3rd, 2018. Union Craft Brewing is set to open Union Collective later this year and triple their production capacity from 10,000 barrels to 30,000 barrels a year.
Given the outsized economic impact of Maryland’s craft beer industry on the state, and the signs that there is a lot of room to grow, it would make sense for Maryland’s policy makers to do whatever they can to support and strengthen local brewers. However, lawmakers in Annapolis are currently divided over how much regulation is appropriate for our state’s craft breweries.
The fight over the state’s craft breweries started last year, after Guinness announced plans to open a new taproom in Relay, Maryland, just south of Baltimore. Existing laws limited breweries to only be able sell 500 barrels (1,000 kegs) of beer a year in their taprooms. However, Guinness expected needing to sell much more than this amount. Because of this, lawmakers passed HB1283, which raised the amount of barrels breweries could sell to 2,000. In a move that only makes sense for the distributor lobby, if a brewery wants to sell more beer than 2,000 barrels a year, they have to sell their own beer to a distributor who then sells it back to the brewery. HB1283 also limits the hours for new breweries in the state in an attempt to limit competition with existing bars.
This year, two competing bills are under consideration in the Maryland House of Delegates: HB518 and HB1052. HB518, supported by Maryland Comptroller Peter Franchot and Maryland’s craft breweries, aims to eliminate most restrictions on craft breweries in the state. Popularly known as the “Reform on Tap Act,” HB518 would remove all limits on beer production and taproom sales, eliminate the requirement for breweries to sell their own beer to a distributor just to buy it back, and remove restrictions on contract brewing. Contract brewing is when another brewery brews your recipe for you to keep costs low – think of how Peabody Heights Brewing in Baltimore brews beer for other local breweries, including Monument City which became so successful under this arrangement they opened their own brewery in 2017.
In contrast to HB518, two delegates from Baltimore City have proposed HB1052. The bill proposes rolling back the amount of beer breweries can sell out of their taproom to 500 barrels, except for Guinness, which will still be allowed to sell 2,000 barrels each year. The bill also places restrictions on the size of samples breweries can give out as part of tours and further inhibits the efforts of contract breweries in the state. One of the bill’s authors, Dereck Davis, stated that his bill was written with the intention of erasing “whatever harm we had caused the industry [with the passage of HB1283 in 2017].” It is not clear how reducing the amount breweries can sell benefits them.
The fight is on in the legislature over the two bills. In response to Comptroller Franchot’s outspoken support of HB518, delegates proposed a bill to set up a task force to determine if the Comptroller’s office should continue to regulate the state’s alcohol industry. In response, Franchot called delegates supporting the bill “ham-handed” who were “wasting time and taxpayer money on idiocy.” Public hearings were held on February 23 for both bills, and the discussion remained heated.
Maryland’s craft breweries have been a boon to the state’s struggling manufacturing sector, and the industry supports thousands of jobs across the state. However, current and proposed regulations may make it difficult for the state to continue to grow this vital piece of the economy. Flying Dog Brewing in Frederick is placing plans to expand on hold until the regulatory climate changes for the better. The Vice President of Union Craft Brewing has said that “If a bill like [HB1052] were to pass, we’d be crushed by its restrictions.” It is worth noting that city and county governments across the state are supporting the Reform on Tap Act and Maryland’s craft brewers, while none have indicated support for HB1052. Whether lawmakers in Annapolis follow suit remains to be seen.