USA: Maryland’s brewers, beer wholesalers and bar owners reach agreement on legislation that would make possible Guinness brewery attraction in the state

Maryland's brewers, beer wholesalers and bar owners reached an agreement on legislation on April 7 that would allow a Guinness brewery attraction to open in Baltimore County and let craft breweries sell more beer in their taprooms, the Baltimore Sun reported.

But the legislation still must clear multiple hurdles before the end of the General Assembly session on Monday, April 10.

The compromise bill would allow production breweries — including the proposed Guinness facility — to sell significantly more beer in their in-house taprooms, and some of that beer could be produced off-site. In exchange, new breweries would have limited hours.

The legislation won approval on April 7 from the state Senate committee that handles alcohol issues, then flew through the full Senate on a 45-1 vote. It now heads to the House of Delegates, which must agree to the Senate's changes before the 90-day legislative session ends at midnight on April 10.

"We're happy we can move forward," said Dwayne Kratt, senior director of state government affairs for Diageo, the international liquor company that owns the Guinness beer brand.

Negotiations have been going on for weeks among Diageo; the Brewers Association of Maryland, which represents independent brewers; the Maryland Beer Wholesalers Association; and the Maryland State Licensed Beverage Association, which represents bars and liquor stores. Once the compromise was reached on April 6, lobbyists for all four organizations furiously studied the legislation's language until next morning.

For Diageo, the stakes were high. Without the ability to sell significantly more beer in the taproom and to import their trademark Guinness Draught beer, the proposed brewery and tourism site in Relay would not be financially viable.

"Baltimore County was always our first choice," Kratt said. "At the end of the day, industry stakeholders and key policy makers got together to come up with something that would make it work. Now it's our turn to get to work and deliver on our promise."

The compromise also settles many concerns of independent brewers, who also wanted the ability to sell more beer in their taprooms and to sell beer that's brewed in other locations, such as collaborations with other breweries or beer that's contract brewed off-site.

"This is an incredible improvement over the version that came over from the House," said Kevin Atticks, director of the Brewers Association of Maryland.

The brewers association urged its members to contact lawmakers about the bill, which he thinks helped convince legislators, wholesalers and retailers to support the revised version.

"Our industry's voice and advocacy helped to create the perception that the industry can't be ignored," Atticks said.

The bill — if approved — would set new rules for the state's 30 production breweries, which make up a little less than half of the state's brewing industry. The rest are licensed as microbreweries, farm breweries or brewpubs and would not be affected by the bill.

Currently, production breweries are limited to selling 500 barrels of beer in their taprooms per year, and the beer must be brewed on site. Diageo estimates that 500 barrels equals about 125,000 pints of beer.

Under the proposed bill, those breweries could sell up to 2,000 barrels of beer per year, and if they reach that limit they can seek permission from the state to buy another 1,000 barrels from a distributor to sell in the taproom — a clear concession to the wholesale industry.

For those taproom sales, breweries can sell beer from "affiliate" brewers — either 25 percent of what's sold in the taproom or the equivalent of 1.2 percent of the total volume brewed on site, whichever is greater. Most craft brewers would fall under the 25 percent threshold, while Diageo — which plans to brew all of its Guinness Blonde American Lager at Relay — would fall under the 1.2 percent of the volume threshold.

Diageo sought that provision to allow the company to import Guinness, Smithwick's and Harp, and also to import partially brewed Guinness beer that would be finished and barrel-aged in Baltimore County.

New production breweries would be required to close at 10 p.m. nightly, while existing breweries and those already in the approval process — about 10 breweries — would be allowed to stay open as late as their county allows.

Sen. Ron Young, a Democrat who represents Frederick County, home of Flying Dog and several other breweries, expressed frustration that the legislation appeared to favor Diageo over home-grown breweries. When an international company like Diageo comes in with a request to help its brewery, "we trip over ourselves," Young said, but "we don't give a damn about the ones that are already here."

Young was the only member of the Senate Education, Health and Environmental Affairs Committee to vote against the bill, which was approved on a voice vote on April 7.

Sen. Johnny Ray Salling, a Republican who has DuClaw and Key breweries in his Baltimore County district, said he though the various parties came together well in a give-and-take over the legislation.

"There has been a lot of compromise," he said.

Salling praised Diageo for its role in the negotiations.

"They're working together with other breweries to make sure they can be part of this," Salling said.

The Relay brewery in southwest Baltimore County would become the new home for Guinness Blonde American Lager and also would brew new recipes that visitors would be able to sample. Diageo has said it will invest $50 million in renovating the building it owns in Relay. The company says the project would create 70 jobs and draw 250,000 visitors in its first year — making it the largest tourist destination in the county.

The Guinness proposal has drawn interest from Maryland's top politicians.

Gov. Larry Hogan has offered general support for allowing breweries to sell more beer and Comptroller Peter Franchot testified in favor of the breweries' requests. Baltimore County Executive Kevin Kamenetz, meanwhile, has praised the Guinness project and wrote a letter this week to Sen. Joan Carter Conway, chairwoman of the committee considering the bill, urging her to pass a version of legislation that would help Diageo and craft brewers.

"We believe allowing the growth of craft breweries will enhance the demand at local bars and liquor stores," Kamenetz wrote. "Because the selection at the taphouse is limited to beer, it will not compete with establishments offering a full selection of beverages."

Following the vote in the Senate Education, Health and Environmental Affairs Committee, the bill moves to the full Senate.

07 April, 2017