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Working Draft Brewing Co. three tier

Tom Rozeske uses a custom steel tap handle to pour a beer for a customer at Working Draft Beer Co. on East Wilson Street. Small breweries like Working Draft have been engaged with other industry players on changes to the state's alcohol laws. 

Disputes over how Wisconsin's alcohol beverage industry is regulated and enforced are set to continue as a legislative study committee winds down this month, and questions remain about how Democrat Gov.-elect Tony Evers' administration will approach the issue. 

The legislative study committee was assembled earlier this year to examine how the state's alcohol beverage laws are enforced, or not. But the committee never dealt with the primary gripe of the state's growing craft beverage industry: that the state's alcohol laws, known as the three-tier system, should be altered and modernized to accommodate a changing business landscape. 

The committee instead focused on the interpretation of current alcohol laws by the state Department of Justice, and the degree to which they are enforced by the state Department of Revenue — both of which are ostensibly more unclear with the election of Democrat Evers than they were when the committee convened.

Throughout its five month tenure, the committee veered into an array of alcohol regulatory issues, including alcohol licensing for wedding barns and illegal out-of-state shipments of alcohol, but ultimately failed to reconcile the chief complaint of wholesale alcohol companies and taverns: that the state Department of Revenue has failed for years to proactively enforce the law as it is written.  

Thus, the larger questions that underpin the ongoing fight between industry players — What does the law say? What does it mean? Is it being enforced? Should it be enforced? Should the alcohol laws be rewritten entirely? — remains. Business groups across the industry — those who represent wholesalers, taverns, wedding barns and craft alcohol producers — say they will continue to fight for answers.

"We’re going to be very involved in both monitoring what’s happening in the aftermath of the inability of this committee to come to a consensus on language that would solve the problem," said Stephen Nagy, the owner of Homestead Meadows, a wedding barn near Appleton, which has been operating since 1981 and has held 1,508 weddings.

Wedding barn operators, along with Americans for Prosperity-Wisconsin and the Wisconsin Institute for Law and Liberty, have been critical of committee proposals to require them to get liquor licenses. Outgoing Attorney General Brad Schimel issued an informal opinion earlier this month indicating that barns that hold events are subject to the state's liquor laws. The conservative WILL said it would sue the state if it begins enforcing law requiring barns to get the licenses.  

"If any government agency adopts the Attorney General's informal opinion, WILL is prepared to go to court to uphold the economic freedom rights of small business owners," said CJ Szafir, WILL's executive vice president.

WILL and Americans for Prosperity have largely allied with businesses in the Craft Beverage Coalition. The coalition includes hundreds of wineries, distillers and craft beer brewers statewide, and has advocated for changing the state's alcohol regulations. The group established a political action committee in July to continue to engage politically.

The PAC, called Drink Local Wisconsin, raised $7,650 in 2018 through October, according to its most recent disclosure. It is just getting started and aims to raise more ahead of the next election cycle, said Brian Sammons, who leads the Craft Beverage Coalition and founded Twisted Path Distillery in Milwaukee.  

"We did it to basically defend and advocate for the Wisconsin breweries, wineries and distilleries in the state.... Our view is that our alcohol laws are broken and Drink Local Wisconsin, our number one mission is fix our laws," Sammons said. "I think it's just the tip of the iceberg of how we’ll operate. I’m hoping politicians see the writing on the wall... that public opinion is on our side and we are for real getting organized so public opinion is going to have to win the day.

"I think we’re going to be a political force," he said. 

Others in the industry have well-established PACs that have raised even more money. The Wisconsin Beer Distributors PAC, for example, took in $64,540 in 2018 through October, according to its latest filing. That group, along with the Wisconsin Wine and Spirit Institute, which represents liquor wholesalers and the Wisconsin Tavern League, largely supports more enforcement of existing alcohol laws before substantive changes to them are considered.   

But with November's election result, the dynamic on several fronts has changed, said state Rep. Rob Swearingen, R-Rhinelander, who chairs the committee. Swearingen is a former president of the Wisconsin Tavern League and owns a supper club in Rhinelander that also hosts weddings.

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"It's very difficult for this committee to move forward," he said. "We’re kind of at a stalemate at that issue."

On Wednesday, the committee approved several pieces of draft legislation that would provide specific penalties for those who ship alcohol into the state illegally, and require commercial shippers like FedEx and UPS to track such shipments and create reports of them.

Currently, only wine companies with a state permit to ship into Wisconsin are allowed to do so, but regulators largely don't enforce that restriction. As a result, beer and spirits are also being shipped into the state, though it's unclear to what degree it occurs because the state doesn't regularly track it.  

Even if the plans become law, however, it is unclear whether the state will enforce them. 

What enforcement will look like next year remains to be seen, Swearingen said, noting that the committee would deal no further with Schimel's opinion on wedding barns, but would continue to monitor the transition at the Departments of Revenue and Justice.

"I do plan on following up with DOR... to see if they will be moving forward on any change in their enforcement policy," he said.

Swearingen stopped short of adjourning the committee fully on Wednesday, noting that it could be a vehicle for discussion of enforcement mechanisms as the Evers' administration is formed. The committee recommended the proposals to the Joint Legislative Council, which must also pass them before they could be introduced in the Assembly or Senate and signed into law by the governor. 

 

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.