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Head of craft alcohol group: Committee formed to clarify state's alcohol laws 'stacked against' small producers

Head of craft alcohol group: Committee formed to clarify state's alcohol laws 'stacked against' small producers

3 Sheeps Brewing (copy) three tier

Festivalgoers get their beer glasses filled up by 3 Sheeps Brewing out of Sheboygan during the Great Taste of the Midwest this month. Lawmakers and business owners are trying to clarify the state's complicated alcohol laws for craft brewers, wineries and distilleries. 

The head of a Wisconsin craft alcohol group says a legislative committee aiming to clarify the state’s alcohol laws is "stacked against" small breweries, wineries and distilleries.

Will Glass, a brewer and president of the Wisconsin Craft Beverage Coalition, which represents 250 breweries, wineries and distilleries in the state, said the Legislative Study Committee on Alcohol Beverages Enforcement, one of several state committees formed over the summer to study solutions to challenging policy issues, is headed in the wrong direction.

The alcohol enforcement committee, which has met twice since June and is scheduled to meet again on Sept. 26, was formed following a series of spats earlier this year among Republican lawmakers, alcohol industry lobbyists and alcohol producers across the state who are seeking clarity and better enforcement of the state's alcohol laws. Wisconsin's three-tier system of regulation divides the alcohol industry into three parts: manufacturers, distributors and retailers. Businesses in each part of the industry work together but must follow distinct rules on how to operate. The system was created to prevent monopolies and dates to Prohibition.

Business interests on all sides of Wisconsin's alcohol industry are frustrated and largely agree the state's alcohol laws are vague, convoluted, riddled with exceptions, and unequally enforced. This has led to misunderstandings and misapplications of the law, including by the state Department of Revenue which enforces the law, and the state Department of Justice which interprets it, according to alcohol industry attorneys, lobbyists and business owners who follow the issue.

"The committee was stacked against us in the first place," said Glass, who founded the Brewing Projekt in Eau Claire. Glass said the scope of the committee should be wider, allowing for the creation of new laws to accommodate a changing craft alcohol beverage industry.

"The consumers should be the one driving the market, not the Legislature," Glass said. "If you want to act as a retailer, you should be eligible to have a retail license. If you want to act as a wholesaler, you should be eligible to have a wholesaler permit."

That change would be a departure from the way alcohol has been regulated in Wisconsin for decades and one largely opposed by the state’s legacy wholesale and retail alcohol companies.  

Glass and others say that change is needed to accommodate a changing industry. He maintains that moneyed interests lobbied for certain people to be on the committee to advance their interests at the expense of small alcohol producers.

Members of all study committees are chosen by the Joint Legislative Council, led by Rep. Robert Brooks, R-Saukville, and Rep. Roger Roth, R-Appleton.

Others say the group has a variety of viewpoints and said it still has several months to determine how to address issues with the state’s alcohol laws.

"We look forward to the committee's discussion on these draft pieces of legislation as well as its ongoing conversations on how to ensure that Wisconsin has safe communities, fair taxation and a strong alcohol industry that gives consumers choices. Groups that care about these issues should give the committee room to discuss and debate the draft legislation," said Nathan Conrad, a spokesman for the Wisconsin Wine and Spirit Institute, a wholesale wine and liquor group. The Wine and Spirit Institute and other wholesale groups have argued that proactive enforcement of existing laws by the state Department of Revenue is most needed.

Yet Glass said ambiguity and confusion in the laws often means businesses lose money by being told to follow the law one way, then later are told they are in violation of it. New business owners often miss out on innovative opportunities to meet growing consumer demand in the dynamic craft alcohol market. 

Eric Bott, director of the conservative advocacy group Americans for Prosperity in Wisconsin, agrees.

"The committee should focus on fixing a broken law and making Wisconsin the best state in the country for the hospitality sector," he said. "Instead, it's pursuing the same old protectionist agenda that created this mess in the first place."

Of the four draft bills before the committee, two would ban breweries and wineries from selling each other's products in their tasting rooms, a practice in which many already engage.

"This is bad because we're trying to take this in the opposite direction. We’re looking to have modernization for different business models and flexibility," said Glass. "There are businesses that right now are brewpubs that want to get into production. They would have to give up their ability to serve wine and liquor, which in their restaurant, would make it hard to succeed.”

The proposals are a first step in getting a bill drafted and initiated in the Legislature. The committee would have to pass a plan, then it would be referred to the Joint Legislative Council. That committee must pass the proposals before they would go to the full Assembly and Senate.

The committee has a wide spectrum of policy to discuss, said Rep. Rob Swearingen, R-Rhinelander, who chairs the alcohol study committee and runs a supper club.

"One codifies (the law) and one totally repeals it and there's a couple in the middle. One could be construed as a compromise, so the committee has a lot to discuss," he said.

Another proposal the committee is considering would allow breweries and wineries to sell other alcohol beverages, a policy direction Glass and other alcohol producers endorse, but would likely be opposed by the state's Tavern League. The group has lobbied against such efforts in the past.  

The committee will adjourn by December when the legislative session ends. 

 

Katelyn Ferral is The Cap Times' public affairs and investigative reporter. She joined the paper in 2015 and previously covered the energy industry for the Pittsburgh Tribune Review. She's also covered state politics and government in North Carolina.

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