On February 23, a House Economic Matters Committee hearing turned into a battle of two opposing craft beer bills for Maryland. As no final decisions has been made on which bill will be passed, it is not too late to ask the important question: What are the opportunity costs of severely limiting Maryland’s local craft brewers while allowing Guinness to thrive alone?

House Bill 518, also known as the “Reform on Tap Act,” was introduced by Maryland comptroller Peter Franchot to eliminate production caps for Maryland craft breweries. On the other hand, House Bill 1052, introduced by Delegate Dereck Davis and Talmadge Branch, seeks to reduce production caps from 2,000 to 500 barrels a year for all craft brewers in Maryland except one: Guinness.

Understandably so, Maryland legislators were thrilled when Guinness owner Diageo announced in 2017 that the company will open a $50 million U.S. headquarter brewery in Baltimore. In response, legislators decided to introduce Bill 1283 to pave the way for Guinness by increasing the old production cap of 500 barrels a year for all breweries with onsite sales in Maryland.  

A year later, Davis and Branch want to reduce the production cap back to 500 barrels a year but conveniently exempt Guinness from the new law, devastating the smaller local brewery owners. According to chief executive Jim Caruso, Flying Dog has halted the $54 million expansion “because of regulatory and legislative issues.” Similarly, the founder of Union Craft Brewing Adam Benesch said, “We would make a greater investment and a greater commitment if we knew there was certainty to allow us to grow.”

The Department of Legislative Services calculated that local revenue would have increased by $9.8 million if the Flying Dog expansion went through. This opportunity cost figure should be extrapolated to understand the overall economic costs on Maryland’s economy if all Maryland breweries decided to halt expansion plans, shut down or move to Virginia.

As of 2017, there are 84 craft breweries operating in Maryland. Maryland breweries support 6,500 jobs and account for $228 million in wages. These dollars are especially important figures because they are fed back to local Maryland economies at gas stations, retail shops, restaurants and so on. For every dollar spent on local craft beer in Maryland, 67 cents is estimated to stay local. An 2016 economic impact study  found that the craft beer industry had an overall economic impact of $802.7 million in Maryland.

Compare these numbers to at most 70 jobs and 300,000 visitors that Guinness has announced it is expecting. It is sufficient to note that 70 jobs cannot replace 6,500 and that 300,000 tourists cannot bring $802.7 million to Maryland.

House Bill 518 “will eliminate the arbitrary limits and change the laws that benefit corporate beer monopolies at the expense of our local, independent craft brewers.” By eliminating the production and take-home sale limits, the craft brewers will be empowered to invest and expand their business at the pace they desire.

 All in all, the Reform on Tap Act of 2018 is meant to increase competition and promote economic growth through increased tourism and job creation in Maryland. Meanwhile, House Bill 1052 seeks to destroy competition, reduce consumer choices and possibly increase beer prices in Maryland because of restricted supply.

In the end, the purpose of regulating the alcohol industry is supposed to be to promote public health, not to remove competition. It is ludicrous to suggest that Maryland’s public health can be improved if people consumed Guinness over local craft beers.

Home-grown breweries in Maryland deserve the same opportunity as Guinness. Blindly advocating for Guinness without understanding the opportunity costs will undermine Maryland’s craft beer industry and hurt Maryland’s economy. Contrary to popular notion, economic growth is not a zero-sum game. If production caps were lifted, healthy competition can lead to simultaneous growth of Maryland’s local breweries and Guinness.