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Wednesday, November 26, 2014 |  Madison, WI: 17.0° F  Fog/Mist
The Daily
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The Wisconsin legislature's war against microbreweries
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Deb Carey is not happy. "I'm so pissed off I can barely see," the founder of New Glarus Brewing Company says about the changes to beer wholesale licensing that the Joint Finance Committee approved Thursday.

According to Carey, the action by the JFC represents another milestone in state government's long history of providing favors to large beer distributors, often at the expense of microbrewers like her.

Current state law severely restricts the options brewers have to distribute their beer. Only breweries that produce less than 50,000 barrels of beer per year are allowed to sell their beer directly to retailers. All others must contract with wholesalers for distribution.

Worried that perhaps microbrewers were operating in too free a market, legislative Republicans have proposed even more restrictions on the beer distribution business. Although the motion approved by JFC will now allow microbrewers to distribute their own beer to retailers, but it will forbid them from holding wholesalers licenses, which, as some articles have indicated, means microbrewers will not be able to band together to distribute beer.*

And what would Walker-era legislation be if it didn't offer more power to state government? The legislation also takes the power of licensing of wholesalers away from municipalities and puts them under the control of the state Department of Revenue.

Only two members of the JFC, Dem Sen. Bob Jauch and -- wait for it -- Republican Sen. Glenn Grothman, voted against it. The other three Dems and 11 Republicans voted in favor.

Supporters of the legislation see it as protecting the little guy by preserving the three-tier system of brewers, distributors and retailers.

Brandon Scholz, president of the Wisconsin Grocers Association, says the legislation is a needed protection against large companies like Anheuser-Busch from buying up distributors that they would use to only distribute their own beer.

"It protects the integrity of the three tier system," he said. "Grocers depend on a strong distributor network...We don't want one beer, we want many beers."

However, he argued, beer companies that take over the distribution business will have no incentive to sell microbrews to retailers.

If the intent of this bill is really to protect Wisconsin retailers from big, bad Busch, then why not just prohibit large brewers from buying distributors? Instead, even microbreweries whose entire distribution might amount to a few truckloads of beer are dependent on large wholesalers buying and selling their product.

But why forbid brewers from operating pubs and restaurants? In fact, the legislation specifies that brewers can operate no more than two restaurants, and that any others it has an interest in may not get more than 60 percent of its revenue from alcohol, and that the restaurant may not sell any of that brewer's beer.

It seems a rather blatant attempt to appease the Tavern League, which supported the legislation, and hopes that brewpubs don't threaten their businesses.

Carey says that the granting of favors to large businesses during times when government is taking away benefits from the middle class is too hypocritical to accept.

"I don't understand it at all. Why are we talking about entitlements [social security and medicare] and how ridiculous they are and giving these entitlements to wealthy wholesalers?"

She added that often those running the companies are often heirs to the family business. As a result: "We don't know if these people are good businessmen. They might be womanizing drunks."

* Originally this post indicated that the legislation would get rid of all exemptions for microbreweries to distribute their own beer. In fact, it eliminates the ability of microbrewers to obtain wholesaler licenses, but it does not prevent them from selling their own beer to retailers.

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