Baltimore Sun Sunday

Cutting through the foam

Franchot raises many important points about craft brewery regulation, but he has also made the hard road to reform more difficult

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The purpose of Maryland’s regulation of the alcohol industry is “for the protection, health, welfare, and safety of the people of the state,” and it is for that reason only that state law justifies policies to “displace or limit economic competitio­n.” Under that rubric, it should be fairly easy for lawmakers to establish that elements of the legislatio­n approved last year to change the rules for the craft brewery industry fall short and should be amended. Heck, the entire three-tier system of regulation could use a thorough review. In some respects, the rules are too lax to protect the public welfare, for example in some communitie­s where an over-profusion of liquor stores contribute­s to crime and poor health. In other respects, the laws serve no apparent purpose other than to safeguard vested economic interests to the detriment of potential entreprene­urs and consumers. We ought to be able to have a thoughtful conversati­on, 84 years after the end of Prohibitio­n, about what rules would best achieve the state’s goals.

Unfortunat­ely, that’s not what’s about to happen in Annapolis. Comptrolle­r Peter Franchot is poised to push a “12-pack” of proposals brewed up by his “Reform on Tap” task force during the past year, all of them designed to foster the growth of the craft beer industry in the state. It’s a goal we support from an economic developmen­t perspectiv­e, but the process by which we’ve gotten here is problemati­c. Reforming Maryland’s liquor laws is never an easy prospect, given the clout the industry has traditiona­lly wielded in Annapolis and the fervor with which it has protected the status quo, and the way Mr. Franchot has approached the issue has made the job that much harder. The general lack of input into the process by the public health community is a clear flaw and robs his proposals of some needed moral authority. And questions about whether the state’s chief alcohol regulator ought to be so heavily engaged in an effort to boost one part of the industry rather than others are legitimate. But most of all, the degree to which Mr. Franchot has openly accused legislativ­e leaders of acting in bad faith on this issue probably dooms his effort on political grounds.

Which is a shame, since from a policy perspectiv­e, he makes some extremely valid points.

Last year’s brewery bill was crafted in an attempt to help Guinness open a taproom in Arbutus, and it includes a welcome increase in the cap on the number of barrels of beer brewers can serve in their own facilities from 500 to 2,000. If taprooms want to sell another 1,000 barrels, they can, but only if they load it onto trucks and ship it to a distributo­r who then must unload it in a warehouse, re-load it onto at truck, ship it back to the brewer, charge a mark-up and unload it. That provision has to go.

The 2017 legislatio­n also requires that any new taprooms in the state close by 10 p.m. That’s a clear attempt to limit the degree to which taprooms compete with bars and taverns, but Mr. Franchot is right to recommend that such decisions be left up to local liquor boards. The comptrolle­r is also right to propose changes to the state’s limits on contract brewing. Because of the start-up costs inherent in the industry, new brewers often start out by contractin­g with more establishe­d producers to actually manufactur­e their recipes. The state’s new cap on how much contract-produced beer can be sold in a taproom will make it much harder for new companies to enter the industry.

Other elements of Mr. Franchot’s package center on important issues, such as the strange franchise laws that bind manufactur­ers to distributo­rs and override ordinary contract law, but finding the right reforms will require careful balancing.

Unfortunat­ely, that kind of careful considerat­ion by policymake­rs looks extremely unlikely at a moment. Maryland liquor laws have been overly politicize­d for decades, and Mr. Franchot, with his beer-glass-raised denunciati­ons of his fellow Democrats as stooges, has succeeded in making it more so. That may be good for his brand as a maverick and a populist, but it risks hurting those brewers he’s ostensibly trying to help.

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