E-Malt.com News article: US, WI: Governor Scott Walker doesn’t veto provision banning brewers’ distributorship

Wisconsin Governor Scott Walker didn’t veto a controversial provision in the state budget that bans beer brewers from owning distributorships and taverns in the state, The Business Journal reported on June, 27.

The budget signed on June 26th by Walker contains a proposal that 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 can sell their own product without a distributor.

Supporters of the provision, which include Miller Coors 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 Miller Coors 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.

In a letter to Walker, the president of the Wisconsin Brewer’s Guild, Jeff Hamilton, said that policy changes inserted into the state budget “seriously impair our existing and future small breweries from meeting our goals, and will likely cause the loss of jobs here in Wisconsin.”

“Legislators were misled by proponents of these changes who assured them that small brewers would be unaffected by or exempt from these changes and that such legislation is needed to ward off a threat from Anheuser-Busch”, he said.

“These are simply not true. In fact, small brewers were the only segment of the industry that were harmed by this policy change and are subject to radical changes in the way we do business,” wrote Hamilton, who is president of Sprecher Brewing Co., a Glendale craft brewer.

“Several business models that have been available to us since we started our businesses, since the end of Prohibition for that matter, have been swiftly removed as options for business growth. All of these options are being used successfully in various parts of the nation, adding to the explosive craft brewing growth.”

A bipartisan group of more than 20 lawmakers urged Walker to veto the proposal over concerns about the impact on the state’s more than 60 craft brewers.

MillerCoors didn’t return a call seeking comment.


29 June, 2011