Stupid Brew Pub Law Update

As I discussed in an earlier post, under current law, a Wisconsin brew pub can operate only two locations if it produces more than 4,000 barrels of beer a year. That is stupid. Why limit businesses like that?

Great Dane Pub & Brewing Co., a Madison-area brew pub operator, opened its third location earlier this year, but is not allowed to serve their own beer there. So instead, they have to serve their competitors' beer. That is stupid too.

Earlier this year, Great Dane asked for a change in the law to lift the production limit to 10,000 barrels and allows up to six locations. That sounds like a good plan, except that 10,000 is too low, especially for places like Lake Front Brewery. But it's still a good start.

But the beer distribution industry (who has strong connections in Wisconsin government) doesn't like brew pubs and microbreweries because they are able to distribute their own beer.

When they heard about Great Dane's proposal, they were quickly able to get a provision added that bans a licensed brew pub operator from also owning a brewery that produces beer for packaged sales.

It also prevents breweries that are currently producing over 10,000 barrels from obtaining a restaurant permit. And if a brewery is under the 10,000 barrel limit, the brewery will be able to get a restaurant permit but will never be able to grow above 10,000 barrels unless they give up the restaurant.

The budget proposal also includes a provision banning Wisconsin wineries from selling their vintages directly to restaurants, liquor stores and other retailers. Instead, wineries would be forced to sell through wine wholesalers.

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.

This bill was in the spotlight last July and was successfully tabled by opposition from microbrewery and brewpub owners in Milwaukee and the rest of the state. But this weekend the bill was quietly added to the proposed state budget, which was passed and now goes to Governor Doyle to sign. He does have power to veto any part of the budget, including this stupid brew pub law.

At least two Milwaukee breweries will be affected by the law if the budget is signed as-is. Lakefront Brewery would not be allowed to open another location (like a restaurant or bar) and sell their own beer there. The production limit might require him to close the Lakefront Palm Garden restaurant, which operates at his brewery, 1872 N. Commerce St. Lakefront Brewery this year will produce around 9,600 barrels and is expected to exceed 10,000 barrels in 2008.

The Milwaukee Ale House is building a stand-alone brewery in Walkers Point. But if this law is passed they may be forced to convert the 2nd Street brewery into a brew pub - a move that would require a large investment.

JSOnline has the full article about the Ale House.


10/26 Update: It appears that Doyle has signed the budget with the new brewing restrictions intact. I guess time will tell how this affects our state microbreweries and brew pubs.

I really don't think Great Dane should be vilified for wanting this change to Wisconsin law, even though Tyranena and other state breweries are mad at them. The Wisconsin Wholesalers Association and the Wisconsin Brewers Guild are the main culprits. The law that was passed puts limitations on the microbreweries in Wisconsin in order to aid the beer distributing businesses. Artificially limiting the success of a business can't be a good thing.

Considering Wisconsin's brewing heritage, we should try to be as brewery-friendly as we can in this state, and do everything possible to promote this unique craft industry, not limit its growth.