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Delaware can’t brew expansion

Delaware has almost one dozen craft breweries and brewpubs, some with multiple locations statewide, but the industry could be growing more than is currently allowed. In what sems to be another arbitrary thing on our books, Delaware law prevents these establishments from expanding beyond three locations in the state.

In September 2019, the popular Iron Hill Brewery grew their business 20 miles over state lines in Exton, PA due to this restriction. Iron Hill wanted to expand in Delaware, but simply couldn’t, pushing them to take their business—and the jobs it created—across state lines.

“It puts an unnecessary burden on these companies that are trying to expand and create jobs here in Delaware,” said State Representative Bryan Shupe, “We’re hindering their ability to compete.”

Representative Shupe sponsored a bill in 2019 that would have eliminated this limit on brewpubs, though it never made it out of committee. A new version of the bill is expected in 2021, and the hard lesson from Iron Hill should push lawmakers to reconsider the measure in a bipartisan manner.

Not only does the current limitation hurt small businesses, but stalls the growth in jobs that they could provide. After the major hit to our labor market from COVID-19, anything that hurts job creation should be heavily considered, and at minimum given a chance to be heard, unlike in 2019.

Our local businesses are struggling to stay afloat. Many brewpubs are a part of the restaurant industry, which has been hit particularly hard by the pandemic. Nationally, the restaurant sector had already lost $120 billion in sales by May, only 2 months after the initial restrictions were enacted. In Delaware, Governor Carney’s new COVID-19 restrictions limiting restaurant capacity to 30% went into effect on November 23.

These businesses cannot survive on takeout alone, which may soon be the case. The 100% costs of staying open aren’t covered by the 30% of sales they are able to bring in. According to the Delaware Restaurant Association, up to 30 percent of Delaware restaurants could close if they do not receive assistance.

This is stacked on top of the struggle of being locked in place by the current Delaware Code.

“You have to pick three locations that have the best opportunity to grow your business and make money. These smaller communities without brewpubs, I don’t think they are going to see them,” Harry Metcalfe, co-owner of Revelation Craft Brewing Company said.

The brewpub restriction is only one example of the burdensome regulatory code that exists in Delaware. These regulations hurt all types of businesses statewide and are rarely reviewed or changed.

As of last year, Delaware’s regulations included 104,562 restrictions, 6.7 million words, and would take 9 weeks to read through—and all of this is in addition to federal regulations. For a small state, that’s quite a regulatory burden.

Delaware ranked 42nd for its regulatory environment and 37th for economic environment pre-COVID. Our lawmakers should be working to serve those they were elected to represent by addressing the job killing regulations. The brewpub bill is a good place to start, but is hopefully one of many steps in a process to truly better our state.