The Maryland General Assembly made a complete mishmash of policy on regulating breweries in the state last spring, and Frederick now has the honor of dealing with the hangover. Thanks, state legislators. Here’s to you.
Jim Caruso, the CEO of Flying Dog Brewery, told The Frederick News-Post last week that his company had halted its planning for a new $50 million brewery in the city because of ”legislative issues.”
In the last legislative session, brewers had asked for changes to the state laws to allow breweries to be better able to expand their business. In typical fashion, the lawmakers offered the brewers something less than half a loaf of bread, and told them it was a good compromise.
The bill raised the yearly limit on beer sales at taprooms of breweries such as Flying Dog from 500 barrels to 2,000. The brewers wanted no limit on sales, but were prepared to accept a 5,000-barrel limit. The law also allows brewers to sell their beer to wholesale companies, then buy back 1,000 barrels of its own beer to sell in the taproom. Of course, that means buying back beer at inflated prices, and who do you think will pay for that, Mr. and Mrs. Consumer?
The final change was to limit hours of taprooms so they wouldn’t compete with bars and taverns, a completely specious fear. A taproom selling beer from only one brewer would never be serious competition for a bar selling many kinds of beer as well as liquor and wine.
Some brewers, knowing how hard it is to get any change in liquor laws through the Legislature, said OK.
But not Caruso. He saw the “compromise” for the sham it was, protecting the interests of bars and retailers at the expense of breweries and consumers. So he said forget it.
Richard Griffin, the city’s director of economic development, told News-Post reporter Mallory Panuska that it was no surprise.
“[Caruso] had worked very hard during the last legislative session to improve brewery regulations for brewers around the state and did not feel as though his efforts were fully successful,” he said, in a massive understatement.
It’s important to remember that Flying Dog moved from Denver to Maryland in 2006 to increase its production. It bought the old Frederick Brewing Co. and grew and grew and grew.
Flying Dog announced plans last year to expand on 32 acres near Frederick Municipal Airport. The company planned a brewery to make 700,000 barrels of beer per year, up from the current capacity of about 100,000 barrels. It would also create 100 new jobs. All good news for Frederick.
The most worrisome part of Caruso’s announcement, however, was his saying the company “is developing other viable options and making long-term commitments to ensure that it has an uninterrupted supply of beer.”
Does that mean the company is considering moving out of Frederick? Caruso says no. He told Brewbound, a website devoted to craft beer news, “I don’t have any plans to relocate Flying Dog outside of Maryland.”
That sounds somewhat reassuring, but we have to be realistic. Flying Dog moved before when it needed more brewing capacity. It needs more capacity again, and our enlightened state Legislature is not making it easy to grow in Maryland. What will the company do? No one should deceive themselves that moving is out of the question.
Our best hope may lie with Comptroller Peter Franchot (D), who spoke out forcefully on behalf of the craft beer industry against the bill. After the session ended, Franchot named a 40-member task force that is examining the state’s liquor laws.
Our local legislators and other elected officials will have to work hard to get a better bill through the Legislature in the next session, which starts in January. There is no time to waste.
We don’t want to see Flying Dog, a great asset to our community and our state, forced to make other plans in a friendlier place.