The Brewers Association of Maryland (BAM) and its over 100 members are proud to announce an agreement has been reached to bring substantive reform to Maryland’s beer Franchise Laws. House Bill 1080, sponsored by Delegate Carol Krimm along with Senate Bill 704, sponsored by Senator Brian Feldman were both voted unanimously this morning out of the House Economic Matters Committee. This is an incredible moment in history for Maryland’s craft beer industry. BAM wants to extend its sincere thank you House Economic Matters Committee Chairman, Dereck Davis and Senate Education Health and Environmental Affairs Committee Chairman, Paul Pinsky for their dedicated leadership in driving a compromise between all industry stakeholders on such an important issue. BAM also wants to thank its bill sponsors Delegate Carol Krimm and Senator Brian Feldman as well as its 26 co-sponsors in spearheading this legislative priority.
“We have reached an agreement that we believe generates transformative and generational change for Maryland’s craft beer industry,” said Brad Rifkin, lobbyist for the Brewers Association of Maryland. “We are grateful for the support of the General Assembly, the Wholesalers and Retailers for helping us reform Maryland’s beer franchise laws for the first time since enacted in 1974.”
Current franchise laws do not allow small brewers to take full advantage of the free enterprise system. This reform changes that and signifies a major leap forward for the craft beer industry here in Maryland.
“With respect to the changes we have been seeking on franchise laws, self-distribution and brewery modernization, we now have consensus on legislative changes and peace in the land between all interested stakeholders,” said Kevin Atticks, Executive Director of BAM.
Summary of the major components of the agreement
Brewers that produce 20k barrels annually or less are released from the restrictive franchise law provisions of 180 notice to a wholesaler and showing of “good cause” to finalize a termination. These breweries now have:
- 45 day notice to terminate;
- no required showing of cause;
- absent any written agreement between the parties, the buyout is fair market value (which would be negotiated during the 45 day notice window and if the parties can not agree, they will submit to binding arbitration);
- the law will take effect for January 1, 2020.
Also a part of our agreement with the Wholesalers was their concession that Brewers will now be able to self-distribute more of their own beer. Today breweries can self-distribute 3,000 barrels of beer annually if they obtain a Class 7 Limited Beer Wholesaler’s License. That limit was increased to 5,000 barrels annually. This provision will be rolled into our Modernization Act.
