New Brewery/Wholesaler Law (Motion 414)

I wanted to repost this explanation of why the Motion 414 in the Budget Bill is causing so much anger among the state’s craft breweries.  Its from O’so Brewing, an excellent Microbrewery from Plover (near Stevens Point).  They have been one of the breweries taking the lead on this issue. Here it is:

We thought it would be appropriate to share with all of you planning on attending the rally in Madison this evening the way Marc has interpreted the Motion 414, thus far. Here is information that you should be informed of for your voices to be heard in a way that everyone will seem to know more facts.

This motion was opposed by Senator Grothman (R) and Senator Jauch (D) before it passed. Please thank them for their bravery to stand with small business. This is not a partisan issue; it is a government control issue.

• Why is this a budget issue? Why is this not being discussed in depth before something this far reaching is put into law? Wisconsin has a rich history of beer making and we would like to make sure that Wisconsin breweries are given the opportunity to continue this legacy. Wisconsin breweries are a job creation engine for Wisconsin and an appreciable amount of revenue is generated from every tier. Lets not possibly jeopardize that.
• This motion was sold to the legislators by Miller/Coors and the Wisconsin Beer Distributors Association on the premise that it would protect Wisconsin from a hostile AB/InBev take over of many current Wisconsin wholesalers. This is simply a farce. Since InBev took over AB, they have had 16 opportunities to buy wholesalers and have passed 16 times. Here is the real truth….Miller/Coors and the WBDA are threatened by the growth that is happening in the craft beer industry. Craft is the only segment of beer that is growing, and it is growing by double digits. Wholesalers also fear that breweries will band together and begin to distribute their own beers. This fear stems from some wholesalers not embracing craft beer because they don’t understand it enough to sell it properly. The days of order taking is over…they actually have to become educated sales people.
• The legislators think they are helping small breweries because of what they have been fed by Miller/Coors and the WBDA. Please let them hear our side. We as brewers know what is best for us, not the government.
• If a brewery currently owns a business that is separate from the brewery, and that business holds a class A or B liquor license, then that license will not be valid once this legislation goes through. This seriously devalues a business and restructures its business model.
• The Department of Revenue will issue brewers a permit that will allow brewers under 300,000 bbls of production to buy and sell retail and wholesale, any beer produced in Wisconsin. It does not outline how much this permit may cost or what type of laws it will create to assure that these rights are intact. This area is very grey and should be spelled out in much more detail before the budget goes to vote.
• The DOR will create a job to oversee and enforce the new laws they will create. The work that this job will encompass is already covered by somebody at the municipal level. This is a job with lucrative pay (73K yr 1, 87K yr 2) and does nothing to support the idea of smaller government.
• Wholesalers will no longer have the right to invest in breweries in Wisconsin. Wholesalers already have a vested interest in a brand when they decide to build that brand, why not let them become more vested. This partnership can be a valuable asset in building capital for a fast growing brewery.
• Current draft of this motion allows for many grandfather clauses for wholesalers but not for breweries.