Brewpub Owners to Protest “Brewpub Tourism Development” Act

Who could oppose a bill with the apparently forthright name of “Brewpub Tourism Development Act” [Wis. 2007 SB 224]? How could one deny the immediate need for the legislation, especially when you learn that the “Great Dane Pub & Brewing Company is unable to serve their own beer at a third Great Dane location opened earlier this year,” as its sponsors the veteran Sen. Fred Risser and newcomer Rep. Scott Newcomer noted in a press release?

It depends on whether you are an inside-the-beltway person or one of the rest of us. Do you do your drinking at Great Dane, like the Madison insiders do, or do you frequent hometown locations like the Milwaukee Ale House or a half dozen others statewide that could be shut down if the bill passes?

Under current law, enacted in 1933 at the end of prohibition, breweries may not own more than two locations to brew and sell their own beer if they produce more than 4,000 barrels per year, a threshold Great Dane has now exceeded in both respects. The law was enacted to prohibit giant breweries from controlling the retailing of their products, as was the case in the pre-prohibition era. It also served to strengthen the role of beer distributors in the state’s three-tiered beer distribution system, designed to keep Al Capone from controlling both ends of the beer spigot by requiring brewers to sell to retailers through distributors.

The bill would increase the beer production limit to 10,000 barrels and allow brewpubs to operate up to six retail brewpub establishments, which seems simple on the surface. But why take 28 pages to do that?

It’s because those 28 pages do so much more, according to Jeff Hamilton, the vice president and general manager of Sprecher Brewing Co., and member of the Wisconsin Brewers Guild. The bill, as written, would oblige beer producers to sell their beer either on site or in bottles. This would stymie craft brewers who hope to expand the distribution of their product by opening bottling plants, as is planned by the Milwaukee Ale House.

The Ale House is a brewpub, and its parent company, Milwaukee Brewing Company, has nearly completed a brewery – packaging facility – not a brewpub – on S. Second St., and another brewpub in Grafton.

Milwaukee Brewing Company president Jim McCabe says if the bill, introduced on July 3^rd (a good day to introduce stealth legislation) is passed and signed by the governor (who says he supports it) McCabe will be forced to choose which of his facilities he must shut down. The same would apply to Gray’s Brewing, Tyranena Brewing Company, Calumet Brewing Company, New Glarus Brewing Company, Green Bay Brewing Company and Milwaukee’s Stonefly Brewery, all of which manufacture beer and sell food.

How could a bill that allows Great Dane to own six brewpubs prohibit six other companies from owning more than two?

“The proposed law would require that forty percent of sales at each location must be food,” McCabe says. “There is no way my new state-of-the-art brewery and packaging facility, located in an industrial building on the south side could function as a brewpub generating 41 percent of its revenues in food.”

Great Dane, however, does more than 40 percent food sales at each of its facilities, and does not have a stand alone brewery, as do the others.

McCabe hired my firm to help him fight this bill. One thing we’ve come up with is “The Spirit of ’07 Milwaukee Beer Party Protest and Demonstration,” which will be held Tuesday, July 10^th at 2 p.m. at the dock of the Ale House, 233 N. Water St. McCabe, joined by others including Russ Klisch, owner of Lakefront Brewery and president of the Wisconsin Brewer’s Guild, will spew the contents of a barrel of beer into the Milwaukee Harbor to protest the loss of business that this “tourism development” bill will cause.

The Senate’s Transportation, Tourism and Insurance Committee will hold a public hearing on the bill Wednesday, July 11^th, 2007 at 1 p.m. in Room 411 south of the State Capitol. Many representatives of Wisconsin’s brewpub industry will be in attendance, despite having less than one week to prepare themselves after the bill’s surreptitious introduction. The committee is expected to go into executive session to vote on the proposal immediately afterward.

This article was originally published by Milwaukee World.