A Summer-Long Beer Garden for Juneau Park?

 

Milwaukee County Parks is planning to open a new beer garden in Juneau Park next summer, if it can get around a prohibition-era federal law.

The county’s two annual traveling beer gardens — sponsored by Sprecher Brewing Co. — already make stops in Juneau Park, and average approximately 2,600 visitors a week while there. “Due to the overwhelming popularity of the Juneau Park Traveling Beer Garden stops, we are exploring the possibility of making Juneau Park a summer-long beer garden,” said Joe Mrozinski, assistant director of business services for parks.

In August, the county released a request for proposals (RFP) seeking bids from breweries or beer suppliers to be the exclusive sponsor of the new, summer-long beer garden. An informational sheet said it should have seating for up to 200 patrons. Initially, the department was seeking a vendor to be the exclusive beer supplier for the new beer garden. There was only one problem: such an agreement is likely against federal law.

The RFP was released on Aug. 7. But on Sept. 7, county contracts manager Suzanne Carter, sent an email to the Wisconsin Department of Revenue explaining the proposed sponsorship agreements and asked for an opinion on the matter, noting they had recently learned it might be against the law. At the time, there were several wholesalers interested in submitting a proposal, but they wanted a written opinion from the state DOR.

Later that day, Tyler Quam, special agent in charge with the DOR, responded saying that state laws covering such agreements likely wouldn’t affect Milwaukee County.

“Notice that this restriction is specific to retailers that hold a Class ‘B’ beer license or permit,” Quam replied. “Since the county cannot/does not hold this license, the county would not be subject to that restriction.” The fact that the county relies on state statutes, instead of local liquor licenses, to sell alcohol in parks is causing issues elsewhere.

But, a little over a week after Quam offered his assessment, he sent a follow-up email explaining that he reached out to the U.S. Department of Treasury’s Alcohol, Tobacco Tax and Trade Bureau (TTB) and they said the exclusive partnership deal proposed by the county would likely be a violation of federal law.

“The TTB regularly monitors illegal exclusivity agreements,” Quam said. “Oftentimes, these violations result in large monetary settlements (i.e. fines) for industry members engaged in the illegal practice.”

The federal government has laws on the books prohibiting “an industry member (e.g. wholesaler) from entering into an agreement that any retailer purchase alcohol beverages from that industry member to the exclusion (in whole or part) of others,” Quam explained.

These laws, specifically, are “Tied House” prohibitions found in the Federal Alcohol Administration Act. This legislation was passed in 1935, codifying federal regulation of the alcohol industry. The law came two years after the end of prohibition with the 21st amendment to the U.S. Constitution.

A tied house was a tavern that exclusively sold one brewery’s beer (it was operationally “tied” to that brewery, and often owned by it). Milwaukee is dotted with former tied houses, almost all of which were connected to Schlitz, Pabst or Miller. Tied houses were replaced, after prohibition, with a three-tiered system of producers, distributors and retailers.

“As always, we want to make sure we are following all rules and regulations,” Mrozinski said. “It was determined that a brewery or breweries may bid on this RFP, but not beer distributors.”

It wasn’t just in Juneau Park that the county nearly revived the historic, albeit illegal, tavern practice. The parks department was soliciting proposals for similar arrangements at the Vine on Humboldt and one of the traveling beer gardens. “After a wonderful 9-year run, the sponsorship agreement with Sprecher Brewing Company has come to an end. Sprecher may or may not decide to bid on this RFP again this winter,” Mrozinski said.

But the prospect of a beer garden in Juneau Park does not appear to be dead just yet. The RFP was amended and the deadline extended to Oct. 7, Mrozinski said, and the department is awaiting a response from DOR as to who is eligible to bid on the project. “Depending on the outcome of the RFP process we will decide if and how to move forward with this concept,” he said.