Each year, the respective Brewers’ Guilds for DC, Virginia, and Maryland sit down among their members and decide on their agendas for the next year. I recently spoke with the heads of all three guilds to find out what their agendas are for 2019, and how readers can get involved to help support their favorite breweries. Below is a lightly edited summary of those conversations.
Executive Director: Paul Dean
The DCBG currently has 12 full members, representing both production breweries (e.g., 3 Stars, DC Brau), and brewpubs (e.g., District Chophouse). Unlike the legislatures in Virginia and Maryland, the DC Council meets year-round, so the schedule for the DCBG’s political activities is a bit different. Paul Dean, who became executive director in 2018, explained that the guild will meet at the beginning of 2019 to plan out their major legislative priorities. In 2018, the DCBG was able to work with the Council on the passage of the Omnibus Alcoholic Beverage Regulation Amendment Act. That bill doubled the number of events that breweries could host from 6 to 12, expanded the ability of brewpubs to sell growlers/crowler cans to go, and changed some of the requirements around materials and production control so that breweries could more easily engage in collaboration projects, among other changes. A big part of the Guild’s effort in 2019 will be working with the Alcoholic Beverage Regulation Administration (ABRA) as they interpret and implement the provisions of the Omnibus Bill, so that those legislative gains are also enshrined in the on-the-ground regulatory approach. The DCBG joined the overall DC restaurant industry in 2018 to oppose Initiative 77, which would have raised and equalized the minimum wage of tipped workers with hourly staff. Dean explained that although the DCBG did not take a position on the alternative compromise bill proposed by Councilmember Elissa Silverman, they were in support of the Council’s decision to overturn the referendum. “Since it looks like the [Initiative 77] process has wound down, we do not expect it to be an issue in the next year.” Beyond local issues, the DCBG is keeping an eye out for a couple of items at the federal level, particularly the steel and aluminium tariffs that are now hitting the brewing industry pretty hard. Additionally, the excise tax reduction on each barrel of beer from $7 to $3.50, that was passed by Republicans in 2017, will come to an end in 2019 without an extension by Congress.
For those looking to get involved with the Guild and support their legislative efforts, Paul recommends:
- Checking in on the forthcoming policy section of the DCBG website;
- Getting in touch with him directly: firstname.lastname@example.org; and
- Keeping an eye out for the quarterly DCBG newsletter
Chair of the VCBG and Founder of Beltway Brewing Company: Sten Sellier
There are currently over 250 craft breweries in Virginia, which includes 41 new openings in 2018 alone, and the vast majority of these are members of the VCBG. According to Sten Sellier, who became the Chair of the VCBG in 2018, “the [VCBG] is the unified voice of craft brewers in Virginia. We’re a collection of small businesses that on our own wouldn’t have a lot of influence, but collectively can create an impact politically and help improve our brewing and business practices.”
For the 2019 General Assembly session, the VCBG is planning on being mostly defensive in nature. Concerns were raised early that macro brewers were going to re-introduce legislation regarding the limits on the value of items that can be given to retailers, known as point of sale materials. This “pay to play” proposal failed a couple of years ago. Currently, there is a per item allowance of $40 that a brewery or wholesaler can spend on point of sale materials. Several years ago, AB-InBev advocated for legislation to increase the trade spending cap to $250 and point of sale to $150. Proponents of this legislation would also like to add metal and wood items, among others, to the list of acceptable POS materials. According to Sten, “This is a problem because if the big brewers can provide permanent fixtures to retailers that are affiliated with a brand it creates issues of unfair competition.” The Virginia Beer Wholesalers Association also opposes the proposed legislation.
Sellier explained that, “I’m really proud of the relationship that the Virginia Craft Brewers Guild has maintained with the wholesalers. We meet twice a year to address conflicts or issues, and talk about common goals and concerns. It’s a productive meeting and fosters a good relationship that helps us better understand each other.” Virginia has a hybrid approach to direct self-distribution rights for breweries, Sten explains that is not something the guild plans on abandoning. Their biggest concern is the situation in Virginia will turn into North Carolina, where wholesalers are increasingly worried that expanded limits on craft breweries self-distribution rights will offer an entry for large conglomerates like Heineken and InBev, to begin owning wholesalers outright. The VCBG understands the issues that the Virginia wholesalers have with that, especially because there is an InBev facility in the Commonwealth. Although many brewer members may want to get into direct self-distribution, Sellier believes that the current law, setting up an ostensibly separate wholesale business, provides a sufficient avenue. That barrier to entry, and unlimited retail sales at breweries, has allowed for a détente to continue between the craft brewers and wholesalers, which has allowed them to work on issues of mutual concern.
There have been discussions with the wholesalers on an attempt to modify the Virginia franchise law, which regulates distribution agreements between brewers and wholesalers, regarding creating a specific set of performance standards for ending an agreement so as to address bad actors. The wholesalers and VCBG have also been working on an expedited ABC process, so that if there is a conflict, it won’t be tied up in court forever. This will hopefully create a path to making it easier to end unhelpful relationships.
“The position of the VCBG is that much more can be accomplished via direct negotiation. The reputable wholesalers we talk to are very sympathetic to the problems that bad actors in their tier present. They want to see the bad actors shut down as much as we do. They are making an effort, but it will be a compromise.”
For readers who want to help support the VCBG, Sten recommends encouraging your local brewery to be active and involved in the guild, because it is only as strong as the member brewers make it. Beyond that, he encourages people to continue supporting brewery taprooms throughout Virginia. The VCBG and its members will be posting items to social media in 2019 telling supporters how to get involved in the legislative fight.
Executive Director: Kevin Atticks
The Brewers Association of Maryland (BAM) currently has over 80 members, and there are close to 100 breweries open, under construction, or in planning in Maryland right now. For 2019, BAM will be going into its third year of trying to modernize Maryland’s beer laws. The general focus will be on increasing a lot of the limits currently imposed on breweries: tap room sales, production limits, and expanding options for brewing models. Franchise law reform, which governs when and how a brewery can end its relationship with a wholesaler, will also be a big focus. All of the BAM “six pack” bills from 2018 are on the table again for this year. They may look a bit different in terms of the numbers being asked for, but the long term goals of the brewers are still the same. Atticks has a lot of hopes for a different atmosphere in Maryland for 2019. “The new legislature is very different from last year’s Assembly. [There are] a lot of younger representatives who are more engaged and fans of Maryland brewing. We’re optimistic about the opportunities for reform going forward.”
For readers looking to get involved with BAM’s reform efforts, Atticks recommends signing up for the newsletter via Marylandbeer.org, and then following the guild on social media. You can keep on eye on things by following @MDBeer on Twitter and Instagram, or the Brewers Association of Maryland on Facebook.
DC Beer would like to thank, Paul, Sten, and Kevin for their time and for sharing the activities of the brewers’ guilds with the DMV craft beer public. We look forward to seeing the progress of the industry in 2019.
Greg Parnas, is a contributing writer to DC Beer and local alcoholic beverage attorney. If you'd like to discuss more about this issue, or other concerns with beer and the law, please feel free to reach him at Greg@dcbeer.com.