Lately we’ve been publishing and sharing a lot on Reform on Tap, otherwise known as House Bill 518. For the record (if you just happened across this article and are totally unfamiliar with Shore Craft Beer), we support HB 518 wholeheartedly.
As a business that exists to support all the tourism-related businesses that can benefit from craft beer-related tourism on Delmarva, we support all the local craft breweries. Many of these breweries will be affected by the dueling house bills. HB 1052 limits production (for every brewery, with the sole exception of Guinness–like, what?), prohibits contract brewing and restricts sample sizes. HB 1052 would therefore make it really, really hard to be a craft brewery in Maryland–harder than it already is.
In fact, it would make Maryland even less competitive nationally. The state is already dead last in the region in terms of per capita economic impact (In 2016, Maryland ranked 47th in economic impact per capita, while Virginia ranked 36th, Delaware ranked 10th, Pennsylvania ranked 4th, and DC ranked 11th). By passing HB 518, Maryland could aim for more than mediocrity; enacting such legislation would make the state more competitive with not only neighboring states, but with those that have the highest impact per capita nationally. Colorado ranks #1, Vermont #2 and Oregon #3.
Shore Craft Beer’s focus is on tourism and the economic impact of these two bills is dramatic and polar. HB 1052 works against small businesses and will drive breweries to neighboring states, while HB 518 creates jobs and improves income in Maryland. Tourism and economic development go hand in hand.
We promote tourism to the Shore through beer festivals and beer challenges, and by supporting all the local craft breweries that call the Shore their home. Driving small breweries out of Maryland is bad for the state’s economy and bad for tourism, especially in the shoulder and off-seasons in a region that is best-known as a summer vacation destination.
Shore Craft Beer’s CEO Ann McGinnis Hillyer testified in support of HB 518 at the bills’ hearing in Annapolis on Friday, Feb. 23. In italics below are portions of her testimony which will hopefully work to, as she stated in Annapolis, urge you to think critically about the effect these craft beer-related pieces of legislation have on our state…If you do, the only conclusion you can make is whole-hearted support for HB 518.
“Sometimes, we don’t get it right.”
The sponsors of HB 1052 said “Sometimes we don’t get it right” when they referred to the current legislation. Going back to more draconian legislation as proposed in HB 1052 will kill our craft beer industry in Maryland. You have a chance to “get it right” by making Maryland one of the most competitive states in the nation by passing HB 518. Your understanding what is at risk will ensure that you vote favorably on this bill.
The full quote is from Delegate Dereck Davis, who sponsors House Bill 1052 alongside Delegate Talmadge Branch.
“We heard the cries of the craft beer industry of how deleterious that piece of legislation was,” he told the Baltimore Business Journal. “Sometimes we don’t get it right, so we were hoping to erase whatever we were doing wrong, whatever harm we had caused the industry, and we were going to put things back the way they were. Time and again, and we heard it repeatedly from the comptroller as well as the industry that 1283 was bad, that 1283 was having a negative impact, and we did not want to do that, so we were trying to undo what we did.”
House Bill 1052 is just as bad, if not worse, than 1283. (It’s an “extended middle finger to the Maryland craft beer industry,” said Len Foxwell, Chief of Staff to Maryland Comptroller Peter Franchot, that “seeks to punish Maryland’s independent craft brewers, much as a parent would an outspoken child, by creating a bill that is even more damaging to the industry than was House Bill 1283.”)
HB 1052 and 1283 are meant to draw in brewing giants that produce more than one million barrels a year, like Guinness (when they themselves are against 1052), while putting unnecessary restrictions on smaller breweries and thus discouraging brewery hopefuls from starting new businesses in Maryland.
Distributors vs. breweries
HB 518 does remove control from distributors and their opposition is understandable, but not defensible…
I support a more robust brewery environment in Maryland which will result in higher sales of craft beer from bars, restaurants and hotels, thereby increasing revenues to distributors and supporting small businesses everywhere.
In Maryland already, every brewery job supports 8.4 jobs in wholesale and retail. In Virginia, where the legislative environment is far more supportive of craft breweries, each brewery job supports 15.2 jobs in wholesale and retail.
…If you do not vote for HB 518,
- Maryland loses breweries, brewery expansions, and loses related small businesses
- Maryland loses beer sales
- Maryland loses tourism
- And Marylanders lose money
Local dollars
67% of money spent on local craft beer stays local. That is money spent in local bars, liquor stores and in breweries. the economic impact of craft beer by state was calculated and analyzed by the Brewers Association. The economic impact = production in the state + total market for craft in the state. Your vote in favor of HB 518 will increase both the production in Maryland as well as the total market for craft in our state.
Craft breweries attract millennials
- 1/3 of all craft beer is consumed by millennials.
- Almost a quarter of this age group do not yet count as craft beear drinkers. Imagine as this group continues to come of age, what the demand for craft beer will be.
- Millennials are mobile and where they land in their late 20s and early 30s is likely where they will “set up shop.”
- 53% of the DC area millennials said they were planning to move in the next 2-3 years.
With Maryland’s proximity to the big cities…we could be a bigger winner in attracting these millennials, particularly in the beautiful but lower cost areas like the Eastern Shore. We need to offer and promote what millennials want, and craft beer and breweries are anchors to their desired locations.
Brewery impact on small towns
It’s no secret that craft breweries revitalize America’s Main Streets. Right now, the evidence that craft breweries have a positive economic impact on small towns is purely anecdotal, though it’s clear across the board and across the U.S. that craft breweries big and small bring in money, jobs and visitors.
Earlier in the month, we conducted our own small, anecdotal study in the town in which our office is located: Berlin, Md. Berlin is a small town in Worcester County with a historical commercial district, a steadily rising population of about 4,600 and one brewery in town since 2011, Burley Oak.
Of the 10 Berlin businesses that responded to our survey (including restaurants and bakeries, a boutique, a bed and breakfast, a hotel and a kayak rental business), 90% said that Burley Oak had a positive impact on their business, and 10% were not sure. Not one business said that the brewery’s presence had a negative impact and over 70% said that the number and quality of local craft breweries in our region had a positive impact on their business. Again, not one business said that these local breweries had a negative impact.
7 respondents wrote-in a response to the query “Please explain any impact that Burley Oak’s presence in Berlin has had on your business.” Answers are as follows.
- They have been known to bring out of towners.
- Serves as a nearby destination that may attract potential customers
- [drives] customer traffic, raises Berlin awareness
- Brings more people to town who often shop and eat, spending money.
- The presence of Burley generates additional revenue but contributes to a sense of community; focused on local community, another product; helps grow town; also provides employment in Berlin; numerous jobs; really fun
- Because Burley Oak does not sell food, they encourage their customers to solicit from area food establishments and bring the food into their’s to eat it.
- I believe that people do visit downtown on their way to the brewery.
What’s next?
On Feb. 27, the date of this article’s publication, Maryland Comptroller Peter Franchot sent out an email entitled “Reform on Tap Momentum Continues to Build.” After the hearing, the Economic Matters Committee’s next step, Franchot said, is to schedule a vote on both bills. Bills that are rejected are “dead” until next year, while bills that are passed move to a floor session where they will be voted on by the House of Delegates.
I ask that you please take a moment to reach out once again to your senators and delegates, let them know that you care deeply about Maryland’s craft beer industry, and ask them to SUPPORT House Bill 518 and OPPOSE House Bill 1052. You can find your state elected officials through the legislature’s official website, Franchot says.
If you don’t know who your elected officials are, just follow the link above where you’ll enter your address and will not only be able to see who your officials are, but how to send them a message.
Want to write to your representative but don’t know where to start? This template might help.
Otherwise, simply tell them that you support House Bill 518 and oppose House Bill 1052, and they should, too. Maryland’s brewing industry is counting on you.
