Brewpubs deserve better Greater latitude: State should let small brewers expand and also keep restaurants.

July 25, 1996

CALL IT The Great Brewpub War of 1996. It started earlier in the year as operators of small breweries in Maryland lobbied the legislature to increase the volume of beer they can produce without losing their right to operate a restaurant pub.

They lost that round when Comptroller Louis L. Goldstein opposed the move. He doesn't want to monkey around with Maryland's post-Prohibition law creating a three-tier system separating retailers, wholesalers and brewers.

But the plight of the state's craft brewers remains tenuous. This situation was not foreseen in 1937 when the state set up its three-tier system. To succeed today, many of these small breweries have to sell their products regionally. But profits from the restaurant pub often make a brewery expansion feasible.

Many local small brewers want to expand, yet to do so would endanger their right to own a restaurant pub. They are caught in a catch-22 of legal restrictions.

The current law is driving business from Maryland. One brewer, Fordham Brewing Co., decided to build a new plant in Delaware to handle its expansion plans because otherwise it would have to sell its Rams Head Tavern in Annapolis. A Seattle brewing firm scrapped plans for a $5 million investment in Sparrows Point because of this restrictive law.

As a result, Mr. Goldstein studied other states and found that Maryland's one disadvantage is its low limit on brewpub production. Neighboring states have much higher limits.

Now the comptroller wants to let brewpubs expand beyond current production limits and still own a restaurant pub for five years. After that transition period, the owner would have to go entirely into wholesale brewing or cut back production to retain his restaurant.

This plan still discourages economic development. It also seems illogical: Why not let a brewer own a restaurant to promote his beer? That's only good business sense.

Gov. Parris Glendening is working on brewpub legislation for next year. Maryland is an ideal location for regional craft brews and for the creation of restaurant pubs. Fine-tuning a 60-year-old law to accommodate the economic realities of the 1990s shouldn't be this difficult.

Pub Date: 7/25/96

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