Brew Pub Law

The Milwaukee Journal Sentinel has an article today on a proposed brew pub bill in the Wisconsin state Legislature. The Brewpub Tourism Development Act limits how much beer a brew pub can produce, which could hamper the growth of brew pubs that want to sell their beer in packaged form at liquor stores and supermarkets. Local brew pubs protested the new bill by spilling bill into the Milwaukee River.

I first heard about this bill a few months ago when I went to visit the new Great Dane Pub at Hilldale Mall in Madison. I'm a big fan of Great Dane and I think their downtown Madison restaurant is probably the best brew pub that I've been to. The Hilldale restaurant is their 3rd location and I even brought an empty growler along so I could take some beer home. But when we arrived at the brew pub we were told that they weren't allowed to serve their own beer because of an antiquated Wisconsin law - so they serve some of their competitors beer their instead. I thought that was crazy.

Under current law (enacted in 1933), a Wisconsin brew pub can operate only two locations if it produces more than 4,000 barrels of beer a year. The pending bill would raise that production limit to 10,000 barrels and allow up to six locations.

This works out for Great Dane, but breweries and brew pubs with standalone breweries think this unfairly favors brew pubs that don't package their own beer. All of the brew pubs in Wisconsin are well under 10,000 barrels a year, but some of the breweries, like Lakefront Brewery, are already near or above 10,000. This means that Lakefront would not be allowed to open another location (like a restaurant or bar) and sell their own beer there. Lakefront thinks this gives brew pubs like Great Dane a big advantage, especially if they decided to open a brew pub in Milwaukee (good for me, bad for Lakefront).

Milwaukee Ale House owner Jim McCabe is against this bill because he's opening a stand-alone brewery in Walkers Point and another brew pub in Grafton. Although the Milwaukee Ale House only does 1,300 barrels a year now, they'll be producing a lot more beer once the brewery is up and running and could reach that 10,000 limit.

Rob Larson from Tyranena is also against the bill and wrote about it in his brewery email newsletter: Today, all small breweries are essentially treated equally. We can all bottle, keg, distribute and are permitted two liquor licenses (one at the location of the brewery and the second on property owned by the brewery). This has created a level playing field between small brewers, whether they choose to have a restaurant or just a tap room. The new legislation (28 pages in length) creates an uneven environment, one which favors brewpubs over microbreweries... and then favors certain brewpubs over others. The bill would permit brewpubs to brew, bottle, keg, distribute and have up to six locations without the onerous financial burden of owning all the real estate. In essence, they can do everything a microbrewery can do... but have four more locations and not be required to own all the real estate. I personally enjoy eating and drinking at the state's brewpubs... but they are also competitors for draft lines and potentially bottle placements in the store. I do not think the state should be enacting legislation that gives them a competitive advantage over us.

Gray's Brewing Company has a brewpub (Gray's Tied House) in Fitchburg, but because they have stand alone brewing facility in Janesville, they would be prevented by statute from opening up any additional brewpubs while The Great Dane Pub and Brewery would be able to do so. The Milwaukee Ale House is hoping to open a second pub location as well as a stand alone microbrewery... but would be prevented from doing so under this legislation while others can have six locations. Quite frankly, I think all breweries should be able to have up to six liquor licenses. I would enjoy seeing a chain of Sprecher or Capital Beer Halls across the state... a number of Leinie's Lodges... or a bunch of Lake Louie Fish Houses... or New Glarus Swiss-themed pubs with chocolate on the menu and clocks on the wall. Personally, I would love to have a chain of bluegrass dance halls in key underserved markets. But these are things that cannot come to pass under this legislation. In fact, the Granite City brewpub chain would be limited to only two locations due to the way in which they brew... is that really fair?

Even the title "Brewpub Tourism Development Act" frustrates me. Do only brewpubs bring in tourists? Is the restaurant really the thing that brings people to town? I suspect the hundreds of thousands of people that tour Miller Brewery might disagree. Or the huge throngs that pass through Sprecher, Lakefront or Leinie's each week. Or the tons that drive down to little New Glarus. Or the thousands that we bring into Lake Mills each year either just to come to the brewery or for many of our special events.

I am not opposed to the Great Dane being able to expand from two to six locations... I just want fairness in how it is done. Let all of us breweries have up to six locations.

I understand there is other legislation recently added to the bill that is also bad for some breweries (none of it's bad the the Great Dane, which is located one block off capitol square - walking distance for the Madison fat cats). Sand Creek Brewing in Black River Falls claims that the new bill means a "that any brewery that is currently over 10,000 bbls and doesn’t have a restaurant permit will never be able to get one if the bill is passed. If the brewery is under 10,000 bbls, the brewery will be able to get a restaurant permit but will never be able to grow above 10,000 bbls unless they give up the restaurant. Since a lot of brewery business models in the state have been built on having a restaurant in their facility, this is a very damaging addition to the bill."

Now I'm a bit worried about the bill. I want there to be more brew pubs, but it sounds like this bill could actually drive some out of business.

Fearful Symmetries has a lot more on the story: http://powervoyeur.blogspot.com/