Fearful Symmetries

Witness a machine turn coffee into pointless ramblings...

12 July, 2007

Messrs. Microbrewers Go to Madison - Part II

(Part I.)

The hearing continued with Jim McCabe of the Milwaukee Ale House. McCabe noted that the current laws are outdated and that the current bill would force new entrants into the market to choose the brewpub or microbrewery path and that this limits growth and the ability of businesses to adjust to the changing market. He implored the senators to get together with all interested parties and hammer out a solution. Sen. Kapanke asked McCabe if he was confident that he could work with Sen. Plale to resolve the issues. McCabe, one of Plale's constituents, said that he would most likely be able to do so. Next Sen. Hansen asked the owner of the MHA what his biggest concern was. The answer was the definition of brewpub as given by the bill. He also said that the new rules would be "something else" and that the government would increase its bureaucracy on the administrative side and that microbrewers and brewpubs would be burdened with more paperwork. Sen. Plale spoke up and indicated that he wanted to work further to amend the bill but wondered if perhaps band aids could be applied now to give relief to the Great Dane and then the parties could continue to refine the law. McCabe responded by asking for a seat at the table to work things through.

This last sentiment would again be echoed later but it's important so I want to comment on it now. Asking for a seat at the table harkens back to what Russ Klisch told the reporter from the AP. The senators have been operating under the impression that the Great Dane was speaking for the diverse interests of brewers across the state when, in fact, they haven't. One of the major gripes those opposed to the bill have is that the bill was composed with little, if any, input from them.

Otto Dilba of the Ale Asylum took a seat and proceeded to make three points. 1) If this legislation were the law of the land a couple years ago, the Ale Asylum would have never opened. 2) The original two page bill was fine but that bits that have been tagged on should be stripped away. And 3) Concerns about distribution should be considered separately in different legislation. Sen. Plale asked why it was that the AA would not have been able to open. Dilba replied that they would have needed 33% more startup capital. (The Ale Asylum started off as a brewpub to get things going until they could begin bottling.)

Following Dilba was Russ Klisch of Lakefront Brewery and president of the Wisconsin Brewers' Guild. Klisch was in no good mood and had a rather aggressive tone as he began by signaling his dismay at not having talked to a single senator until last Friday, 6 July. He continued by citing a magazine (trade journal?) article which showed that, of the top 50 breweries in the United States, 30% of had restaurants. His next criticism was that the 10,000 barrel limit is wrong. This was followed by a tirade attacking the tourism part of the bill's name. Klisch noted that 60,000-70,000 people go to his brewery, which has a restaurant, per year and that about half of these folks are from out of state. I paraphrase him here: "Why should I have to come before a tourism board and report this?" Further, he thought it ridiculous to "outlaw the sale of food at a brewery". Lastly, he concluded with an anecdote about how he was approached by a German businessman who was interested in opening an American incarnation of the Hofbrauhaus of Munich in Milwaukee. Klisch said that this new legislation would make that and its influx of business and jobs impossible. At this point he said that he thought he should stop and one of the senators said that he agreed. This brought a laugh from the committee and onlookers alike. Clearly the committee didn't like something about Klisch's presentation. Whether it was his tone or the substance, I won't venture a guess.

Regardless, the committee got another dose of impassioned testimony from Heidi Supple of the Supple Restaurant Group which owns the Fox River Brewing Company and Fratello's brewpubs. She too was very angry and let it be known from both her tone and her comments. Supple's group was looking to open a fondue restaurant in Milwaukee and it would be their sixth location. Because it also owned brewpubs, this made the SRG a brewing entity, if you will, and thusly limited them to six locations total despite the fact that not all of them actually brewed beer. She noted that the 10,000 barrels per year limit was not the issue. Her brewpubs manufactured only about 2,000 barrels per year while the group as a whole purchases roughly $200,000 of alcohol per year from wholesale distributors. If the bill passes and the fondue restaurant comes to fruition, her business would be unable to expand. Currently they are working with a Canadian group to start an upscale café and this plan is now in jeopardy. (Recall the comments of Pete Hanson from the Wisconsin Restaurant Association.) "Please don't limit me," she pleaded. There are no such limits on Applebee's, she noted. She also remarked that she can't come to the legislature again in six months when the law needs changing so it has to be done right this time around. The only senator to comment was Mr. Hansen and this was only to clarify the names of Ms. Supple's operations.

Rob Larson from Tyranena spoke next. I thought he'd follow in Klisch and Supple's footsteps but he was very calm and non-combative. He started by saying that, if the bill were to become law, that his business would be negatively affected. Tyranena, he noted, competed against the Great Dane and Milwaukee Ale House for taps and this new legislation would give brewpubs an unfair advantage. Further, if the bill were law in the past, a certain brewpub near a mall on the westside would not be open now. (I presume he meant Granite City.) In addition, Larson's plans for a second location that would serve food would have the kibosh put on it if the bill were to become law. A question by Sen. Hansen asking for clarification on this point led to the legislative council stating that the provisions under consideration would restrict microbreweries to 0% of income from food.

From the other side of the room came Kyle Maichle of Students for Prosperity-UW-Madison. He seemed rather nervous and spoke hurriedly using the phrases "I believe" and "I really think" about a million times in two minutes. The gist of his message was that the bill would make bad law because it was confusing and limited entrepreneurs. Enough said.

Again, I'll end this part before it gets too lengthy. A couple things to consider: 1) Ms. Supple's testimony reiterates the fact that this legislation will affect folks whose business is not strictly brewing. 2) There are brewers whose businesses will be negatively affected the second this bill becomes law if no grandfather clause is added.

In the final part, we get to hear from the other side. Plus I'll illustrate my closing comments with some video.
|| Palmer, 9:02 PM


Post a Comment