The Wisconsin Assembly passed legislation which seeks to add new regulations to beer distribution in the state Wednesday.
The bill is aimed at protecting the state's "three-tier" distribution system whereby beer manufacturers sell to wholesalers and wholesalers then sell to retailers, said Jim Bender, communications director for State Rep. Jeff Fitzgerald, R-Horicon, an author of the bill.
Under the proposed legislation, beer cannot be sold, shipped or delivered from a producer to a retailer unless the beer is transported and sold first through a wholesaler's warehouse, Bender said. This law previously applied only to out-of-state beer producers who shipped their product into Wisconsin, and now the law also encompasses in-state beer manufacturers as well.
"Basically what it does is safeguard the three-tier system," Bender said. "It's a very regulated system that protects consumers and protects brewers."
Bender noted the system has been in place since Prohibition was repealed to keep large beer producers from monopolizing the market.
"The people involved do not want to see a Wal-Mart or a Costco sue to be able to deliver beer outside the current system," Bender added.
A provision of the bill allows breweries producing fewer than 100,000 barrels in a year to distribute from an on-site wholesale warehouse; through an amendment, smaller manufacturers making fewer than 50,000 barrels annually would be allowed to obtain a wholesaler's license and would be exempt from the law. The bill also has other exceptions for special circumstances, such as when a beer maker ups its production for a festival or other occasion.
However, opponents of the bill say it impedes the free-market system as it pertains to beer sales in the state.
"It is unfortunate that the Legislature continues to get more involved in what should be the free market — the marketplace should be in charge of some of these issues," Mike Mikalsen, research assistant for State Rep. Stephen Nass, R-Whitewater, said.
Mikalsen added though the amendment improved the legislation, Nass voted against the bill as a whole.
"The bill made some significant hurdles that would have prevented small brewers from expanding beyond a certain point," Mikalsen said.
Additionally, some small beer producers in the state say it stifles their chances to expand in the state because making the jump to crafting more than 50,000 barrels in a year would force them to change their distribution scheme, creating additional costs.
Brent Weycker, vice president of Titletown Brewing Company in Green Bay, said the limits on beer producers are "artificial" and harmful to the state's smaller producers.
"In Wisconsin, we should be proud of our brewing heritage and not try to squelch that," Weycker said.
Though Titletown produces about 1,200 barrels of beer per year and would not be affected by the proposed law, Weycker said other brewing companies in the state which are a little larger, like the New Glarus Brewing Company, could be discouraged by this bill.
"A lot of these rules go back to Prohibition and limiting growth of the brewing industry," Weycker said. "You're stopping the craft brewing industry from encouraging any kind of growth."
Despite this, Bender said the legislation had the support of beer makers, distributors and retailers of all sizes in the state, and will work to keep prices in check for consumers and ensure they will have a variety of brands of beer to choose from.
"Now there's competition on all three tiers … which means there will be more beers on the market at a cheaper price," Bender said. "And I know people in Wisconsin want to have more beer at a cheaper price."
