E-Malt.com News article: US, WI: Legislators request veto of provision banning brewers from owning distributorships and taverns

A group of legislators has requested that Wisconsin Gov. Scott Walker veto a provision in the state budget that would ban beer brewers from owning distributorships and taverns in the state, the Business Journal reported on June, 21.

“Wisconsin is known for its breweries and allowing small craft brewers to own their own taverns will highlight their product,” said state Sen. Glenn Grothman (R-West Bend). “This is the type of provision that should have been dealt with in a separate bill. It was complicated and the thriving craft brew industry did not participate in drafting this provision.”

Supporters of the provision, which include MillerCoors LLC, claim the legislation is needed to stop St. Louis-based Budweiser and Bud Light brewer Anheuser-Busch Cos. from buying wholesale distributors in Wisconsin. The vote sends a strong message to the nation’s dominant brewer, which has been pursuing a national agenda to develop so-called brewery branches throughout the country, backers of the provision said.

Chicago-based MillerCoors operates a major brewery and administrative offices on Milwaukee’s west side and is Anheuser-Busch’s main rival in the U.S. market.

However, many of the state’s craft brewers have voiced opposition to the measure, claiming that the current system has helped foster their growth.

The provision “sends the wrong message to nascent businesses” and restricts possible avenues of growth, said state Sen. Pam Galloway (R-Wausau).

“It was particularly disturbing in that it came out of the blue with no time for craft brewers to respond,” Galloway said.

The Wisconsin Brewers Guild, which represents craft brewers, is against the legislation. The guild opposes a long line of supporters that include the Wisconsin Beer Distributors Association, the Tavern League of Wisconsin, the Wisconsin Grocers Association, the Wisconsin Petroleum Marketers & Convenience Stores Association, the Wisconsin Wine & Spirits Institute and MillerCoors. The provision combines the brewer’s permit and wholesale and retail licenses into a single permit under state - not municipal - control that effectively bans brewers from having ownership stakes in wholesale distributors. Under the current law, brewers must obtain three separate licenses - a brewer’s permit, a wholesaler’s license and retail license.

The legislation prohibits wholesale distributors from investing in a brewery, but grandfathers in any existing deals. Breweries that produce fewer than 300,000 barrels of beer each year could sell their own product without a distributor.

“Elected officials were not given adequate information before we were forced to vote on this provision,” said state Sen. Robert Jauch (D-Poplar), a member of the Legislature’s Joint Finance Committee.

Small businesses, including craft brewers, are leading Wisconsin’s economic recovery, said state Rep. Evan Wynn (R-Whitewater).

“Wisconsin should be moving in a business-friendly direction and not legislating more needless government regulation,” Wynn said.

The state has “no business punishing these small entrepreneurs,” the group of seven legislators stated in a letter to Walker.

The budget provision will force brewers to change their business models and “hurt their chances of survival,” they said.

Walker's office said the governor will consider the veto request, but did not take an immediate stance.

“We’ll evaluate that provision and make any veto-related announcements once the decisions have been finalized,” Walker spokesman Cullen Werwie said.


24 June, 2011