Two sources, different stories

The Associated Press reports:

A proposal that would require breweries and wineries to stop selling their products on-site and instead work through distributors is probably going nowhere, a key Republican lawmaker said Wednesday.

Craft brewers and wineries were outraged last month when a mysterious memo emerged detailing a plan that would require them to work through distributors rather than sell their products directly to customers in on-site tap and tasting rooms. The brewers and wineries feared the proposal would force them to pay exorbitant fees to distributors and the Legislature’s finance committee would slip the plan into the state budget on its last night of work on the spending plan.

Rep. Dale Kooyenga, a Brookfield Republican who sits on the finance committee, said he doesn’t think the panel will make any changes. The proposal doesn’t make any sense and the committee wants to foster craft breweries’ growth, not hamper it, he said.

“I am 99 percent certain it’s dead,” Kooyenga said.

William Glass, president of the Wisconsin Brewers Guild and Eau Claire brewery the Brewing Projekt, said he hopes Kooyenga is right.

“We’re pretty confident, but until the governor’s signature is dry on the budget bill anything could happen,” he said. “It’s politics.”

It’s unclear who is pushing the changes. The conservative group Americans for Prosperity obtained the memo and leaked it to media outlets in June. The group’s Wisconsin chapter director, Eric Bott, declined then to reveal the document’s source and didn’t immediately reply to an email Wednesday asking again how the group got it.

The memo features the acronyms for the Wisconsin Tavern League, the Wisconsin Beer Distributors Association and the Wisconsin Wine and Spirit Institute, which represents wine distributors, on top of the first page. Despite the acronyms, tavern league lobbyist Scott Stenger said Wednesday that the league had nothing to do with the document and someone must have added the league’s acronym.

Stenger said in June that his members can’t compete with craft breweries that are growing into tourism destinations. He said Wednesday that he meant that the league doesn’t want breweries to obtain liquor licenses, which would give them an unfair advantage over bars.

“That doesn’t mean we’re opposed to Capital Brewery having a tasting room,” Stenger said. “But they shouldn’t be doing what we do.”

Eric Jensen, executive director of the beer distributors association, said in an email that his group wasn’t aware of any plan to force craft brewers to sell through distributors and if any such proposal was dead that would be “great news.”

“We have never sought and would not support any effort to require craft brewers to sell through distributors,” Jensen wrote.

He didn’t immediately reply to a email asking how the association’s acronym got on the memo.

Wisconsin Wine and Spirit Institute lobbyists also didn’t immediately reply to emails seeking comment.

But the River Falls Journal reports:

A proposal that critics say could spell doom for taprooms in Wisconsin breweries remains afloat, according to an Assembly member.

Rep. Shannon Zimmerman refuted a Wednesday, July 12, media report that the proposal — which has not been made public — is effectively dead.

“It is my understanding from information shared with me last night that its inclusion in a 999 motion remains a very real possibility,” the River Falls Republican said Wednesday afternoon of the proposal, which reportedly bans Wisconsin’s alcohol producers from retailing their own products without a distributor.

Zimmerman’s assertion follows a media report that quoted Rep. Dale Kooyenga, R-Brookfield, saying the proposal will not be slipped into legislation by the powerful Joint Finance Committee, of which he is a member.

Zimmerman said he doesn’t doubt Kooyenga’s opposition to the bill, but fears others on the budget committee might feel differently.

The freshman lawmaker said he couldn’t believe his ears when word first circulated about the proposal. And even though the document hasn’t taken the form of drafted legislation, Zimmerman said he’s warning others of its presence.

“It’s a very real document,” he said.

He and others in Madison are concerned the proposal could be slipped into the state’s budget by the Joint Finance Committee as a controversial 999 motion that’s been used in the past to include legislation that didn’t face public debate at the Legislature.

As for the taproom proposal, Zimmerman said there’s no debate in his mind about its possible repercussions.

“This motion is a direct assault on craft brewers, wineries” and other independent alcohol operations, he said.

Zimmerman makes no bones about the fact that he and his wife own a winery, but said he’d oppose the motion regardless.

According to multiple accounts of the proposal, it aims to ban alcohol producers from having retail operations such as taprooms and winery tasting rooms.

The document, Zimmerman explained, would create an “alcohol czar” apart from the state’s revenue department. That new office would have the authority to enforce a rule requiring breweries and wineries to contract with distributors to distribute their own products.

“Multiple groups” are pushing the proposal, Zimmerman said, adding that the Wisconsin Tavern League “had a part in this.”

He said the bill is being pushed by lobbying interests who “believe there is finite alcohol revenue to go around in Wisconsin.” Zimmerman contends that microbreweries, wineries and distilleries are a regional draw that lead to customers spending dollars elsewhere in the Wisconsin communities they’ve come to visit.

“We’re better than this,” Zimmerman said. “We are simply better than these back-office special interests.”

Russ Korpela, owner of Common Man Brewing in Ellsworth, was one of many craft beer retailers voicing opposition to the document. Though his business doesn’t yet brew its own beer, he hopes to one day. And in the meantime, he relies heavily on craft beer — a product his customers demand.

“This is a continuing push by the major domestic brewers in their war on craft beer and they’re taking a different way to go about it,” Korpela said. “I hope a message has been strongly sent that they’re not going to use the rule 999 to insert it into the final state budget.”

The tune didn’t change in Hudson, where Pitchfork Brewing co-owner Mike Fassino said the proposal could be a business killer.

He said about 80 percent of Pitchfork’s business flows through its taproom.

“It would be crippling,” Fassino said. “It would be virtually impossible, I think, to survive.”

Regardless of which story you believe, this is a proposal that should never have been made. There is no good reason to create an “alcohol czar,” nor is there is a good reason to make microbreweries adhere to the same system as MillerCoors and InBev, which is a system that shouldn’t exist anyway.

It also shows how regulated, despite Republicans being in charge of state government, business is in this state.State law mandates the senseless three-tier liquor system. More generally, the state sees fit to regulate what business must charge their customers (the minimum-markup law), and has one of the highest corporate income tax rates in the state. None of those three should exist either.

 

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