Beer distributors in Maryland are against two bills that could help the craft beer industry, and I think I know why. These two bills, Senate Bill 445 and Senate Bill 226, will raise the production limit of brew pubs from 22,500 barrels per year, to 60,000 barrels per year. Theoretically this should increase the amount of beer that distributors sell and everyone should make more money, but that isn’t how distributors see it.
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A lobbyist for the Maryland Beer Wholesalers Association told the Baltimore Sun, that if brew pubs want to expand, they should sell their restaurants and convert their brewpub permit into a full-fledged brewery license. The only reason I can find for the distributors to take this stance is that a brewpub with a “micro-brewery license” can sell up to 4,000 barrels of beer at its brewpub. That’s 4,000 barrels that can be sold without distributors getting a cut. A brewery with a “full-fledged brewery license” can only sell 500 barrels of beer at its brewery. The difference is up to 3,500 barrels of beer sold per brewpub without distributors making a dime on the sale. All Maryland brewpubs combined, that’s 42,000 barrels of beer that distributors don’t get to touch.
Distributors know that they can get more money by forcing growing brewpubs to abandon the profitable restaurant side of their business, but this is short-sighted. Expanding the capacity of existing breweries means more overall production and more overall beer that will need distributors.
The Maryland Beer Wholesalers Association may have other reasons for opposing these bills (e.g., more smaller breweries may be more profitable than less breweries brewing more beer), but I only see good things for brewers, consumers, and the state of Maryland. Contact your representatives and let them know if you support or oppose these bills.