Tuesday, November 21, 2017

Bob Dylan – "The Times They Are a-Changin'" (1964)

Come senators, delegates
Please heed the call
Don't stand in the doorway
Don't block up the hall

My apologies to Bob Dylan for tinkering with the words of “The Times They Are a-Changin’.” 

The original lyrics to that song read “Come senators, congressmen,” which I’ve changed to “Come senators, delegates.”  That’s because I’m not addressing members of the United States Congress – I’m addressing members of the Maryland General Assembly, whose lower chamber is called the House of Delegates.

But my message is essentially the same as Dylan’s.  The times need to be a-changin’, folks – it’s time for Maryland’s legislators to stop standing in the doorway and blocking up the hall when it comes to Maryland’s craft beer industry.

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The call that I’m hoping members of the Maryland General Assembly will heed was sounded yesterday by Maryland Comptroller Peter Franchot, when he unveiled the “Reform on Tap Act of 2018” – proposed legislation intended to reform the outdated and dysfunctional laws that govern Maryland’s craft beer industry.

You can click here to read a press release summarizing the Comptroller’s proposal.

Maryland Comptroller Peter Franchot
That legislation represents the culmination of an effort that began back in April when Franchot announced the creation of the “Reform on Tap” task force, whose 40 members included brewers, beer distributors, beer retailers, state and local officials, and consumers from every region of Maryland.

The task force held a series of public meetings over the summer and fall to examine the pros and cons of existing Maryland regulation of craft brewers, with particular attention to how Maryland’s laws compares to the laws of neighboring states – and how Maryland’s laws place its brewers at a serious disadvantage compared to brewers in those states.

Franchot’s staff – led by his very able staff director, Len Foxwell – drafted a report summarizing the task force’s findings.  That report – which was titled Maryland Craft Beer: A World Without Limits – makes a compelling case for enactment of the proposed legislation.  (You can click here if you'd like to read that report.)

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I was pleased when Comptroller Franchot asked me to be a consumer member of the “Reform on Tap” task force.

For one thing, I shared Franchot’s doubts about the legitimacy of the Maryland laws governing the craft beer industry.  If I learned anything from my years as a Federal Trade Commission staffer, it’s that much of the government regulation that purports to protect consumers from being taken advantage of by businesses are actually intended to insulate businesses from competition.  The fingerprints of special-interest groups were all over the Maryland laws that regulated brewers, and the Comptroller was taking direct aim at those protectionist laws.  

Also, I’m a big fan of local craft breweries.  As far as I’m concerned, there’s no better way to spend a sunny day than to take a long hike or bike ride and then adjourn to a nearby craft brewery for beer, food, and conversation.  

The “Reform on Tap” task force
meeting at Calvert Brewing
Maryland’s craft breweries come in all shapes and sizes.  Many are small and unpretentious – the setting is modest and the man or woman serving your pint is likely the owner or a co-owner, who is more than happy to tell you all about how the beer you are drinking was made.

Others are large and sophisticated operations located in busy urban locations that offer a wide variety of beers and very good food to boot.

When the weather is pleasant, there’s no better place to be than sitting outdoors at one of Maryland’s farm breweries, enjoying a picnic lunch with your beer.  If you’re with your kids or grandkids or a dog or two, a farm brewery usually offers plenty of space for the little ones to kick around a soccer ball, throw a Frisbee to your dog . . . maybe even pet a horse.

Have a beer and hang out with 
horses at the Waredaca farm brewery

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The “Reform on Tap” meetings were always quite informative, but I have to be honest with you: the best thing about those meetings was that they took place at craft breweries around the state.  After the PowerPoint presentations and question-and-answer sessions were over, it was time to sample the host brewery’s beers and get acquainted with the brewers in attendance.    

Quite a few of those brewers are young couples who gave up their jobs and risked their savings to build a business of their own.

For example, task force member Julie Verrati and her wife, Emily Bruno, are ex-government employees who left their white-collar jobs a few years ago to found Denizens Brewing, a thriving brewery and kitchen located in downtown Silver Spring, just a short walk from a Metro stop.

Julie Verrati and Emily Bruno
of Denizens Brewing
Task force member Carly Ogden and her husband Brian moved from California to Maryland only last year, just weeks after Carly gave birth to the couple’s first child.  When their plans to start a brewery in Baltimore fell through, the couple decided to open their new venture instead in the small city of Frederick “on a lark.”  Attaboy Brewing, which occupies a renovated warehouse, isn’t fancy – but neither are the hands-on Ogdens. 

Brendan and Bailey O’Leary are another husband-and-wife team who met when they were both engineering students at Georgia Tech.  The O’Learys – 30-year-olds who are the parents of two small children – hope to open the doors to their new brewery, True Respite Brewing Company, early in 2018.

(True Respite will be just a hop, skip, and jump from my home in Rockville so I’m counting the days until then.)

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Like other small businesses, craft brewers are subject to the vagaries of the marketplace.  Grain prices are unpredictable, utility costs fluctuate, and rents usually go up year after year.  

Consumers are notoriously fickle – they’re constantly searching for the next big thing.  The popularity of craft beers has boomed over the past few years, but there’s no guarantee that positive trend will continue.  

There are well over 5000 craft breweries in the United States, and that number continues to grow at a rapid pace.  You have to wonder how many of them will still be in business in five or ten years.

Brendan O'Leary shops for equipment
for his soon-to-open brewery
A craft brewery near my home went belly up last year.  A new brewery opened for business recently just a block or two from where the failed one was located, and the O’Learys’ new site is only a mile and a half away.  Will two breweries be one too many for my neighborhood?  No one knows for sure what the answer to that question is – if you’re one of those brewers, you pays your money and you take your chances.

Craft brewers like Verrati and Bruno, the Ogdens, and the O’Learys have a lot to worry about.  The last thing they need is for state or local governments to throw up roadblocks to their success.

It’s one thing when a business has to deal with government regulation that imposes costs but is well-intentioned.  It’s another thing altogether when that regulation is at the behest of special-interest groups who rely on their political connections to get the upper hand.

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The “Reform on Tap Act of 2018” would erase a number of arbitrary, anti-competitive, and anti-consumer provisions from Maryland law.  

I’m going to mention only the most ridiculous and blatantly protectionist provision in current law – the notorious “buy-back” provision that was enacted by the Maryland legislature earlier this year.

In general, a Maryland craft brewery can sell only 2000 barrels of its beer annually at its own taproom.  That brewery is allowed to sell an additional 1000 barrels of its beer but only if it first seems those 1000 barrels to a beer distributor, who must transport that beer from the brewery to its warehouse, offload the beer from its trucks so that it “comes to rest” on the floor of the distributor’s warehouse, load the beer back into its trucks, and drive the beer back to the brewery, where it can be served to customers.

What’s the point of all this wasted time and effort?  To generate a profit for the distributor, who sells the beer back to the brewer at a higher price than it paid the brewer for that beer in the first place.  (Gee . . . I wonder whose idea this law was?)

You can click here to view a .pdf that explains which current statutory provisions would be repealed by the Comptroller’s proposal.

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In most cases, that provisions would simply be wiped off the books.  That approach is consistent with what one brewer said at a task force meeting in June:

We’re not asking for anything from the Maryland legislature.  They just need to stop getting in our way!  Stop tying our hands!

That view is shared by each and every Maryland craft brewer I’ve met.  Brewers aren’t asking the legislature to pass a law that insulates them from competition, or that favors them vis-à-vis wholesalers or retailers.  They just want to get out from under laws that limit their ability to make and sell beer – and that limit the ability of consumers like me to buy and enjoy that beer.  

Carly and Brian Ogden of Attaboy Beer
flank task force member Sen. Ron Young
“Don’t stand in the doorways, don’t block up the hall,” was Bob Dylan’s plea to the government in “The Times They Are a-Changin’,” and it’s the plea of Maryland’s craft brewers to the Maryland General Assembly.

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If you want to learn more about the proposed legislation, the meetings of the “Reform on Tap” task force, and the events that inspired Comptroller Franchot to put all this in motion, a good place to start is historian and craft beer aficionado Maureen O'Prey’s Brewed in Maryland website.  Just click here to be taken to the “Reform on Tap” section of Maureen’s website.

Another excellent source of information about Maryland craft breweries in general and the “Reform on Tap” initiative in particular is Liz Murphy’s Naptown Pint blog.  Click here and you’ll be taken to Liz’s home page. 

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“The Times They Are a-Changin’,” which one critic has called “the archetypal protest song,” was released in 1964 on Bob Dylan’s album of the same name.

Here’s “The Times They Are a-Changin’”:

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