Fearful Symmetries

Witness a machine turn coffee into pointless ramblings...

12 July, 2007

Messrs. Microbrewers Go To Madison - Part III

(Part I, Part II.)

The last speakers were the team of Eric Jensen and Mike Wittenwyler. The former heads the Wisconsin Beer Distributors Association while the latter is an attorney for the Wisconsin Wine & Spirits Institute. I'll be honest here, dear reader, and tell you that I'm on the side of the microbrewers against the bill. Having said this, I will give the opposing viewpoint a fair shake.

Jensen spoke first and plead his case. First he noted the Granholm case from 2005 in which the Supreme Court of the United States "struck down two states' laws that forbid wineries located out of state to ship wine directly to customers in those states". Secondly he noted the role of wholesale distributors in the 3-tier system. (Producers-distributors-retailers) With much of the blame from the microbrewers being directed at him, he defended himself by saying that distributors have a stake in seeing beer production go up in Wisconsin too. Wittenwyler took over with a very paternal attitude. He began by saying that alcohol is a "controlled substance" and that alcohol legislation is being considered by virtually every state – it is a big issue. The Granholm decision having a far-reaching effect, he claimed. This was also evident by litigation by Costco in Washington state where they seek to be able to bypass distributors and buy directly from producers. Finally there was the Internet where retailers were selling to consumers in other states. Wittenwyler spoke of preserving the 3-tier system which is how we've chosen "to deal with this controlled substance". The courts, he claimed, were taking us towards a system where you are either a brewpub or a brewery, not the distributors.

This kind of rhetoric really gets in my craw. By using the term "controlled substance", he conjures images of crack addicts and ATF agents busting drug rings that ruin communities instead of breweries and brewpubs where people gather to eat, drink, and socialize. Secondly, his case was almost boastful. He had this attitude that he was doing the state of Wisconsin and its citizens a favor by protecting it from the big, bad monster of litigation by Costco or a similar entity. It was as if he was pretending to be the only voice of sanity while everyone else was on this quixotic venture and thusly he was saving us from ourselves.

He continued by saying that we can't legislate for all future concerns which is true enough. But can the bill be amended to address some future concerns? And, from his statement that the bill as it stands takes care of current companies led me to believe that there was a grandfather clause.

Sen. Plale asked if he was amenable to a legislative counsel study to provide a framework for the law. Jensen replied that he was open to conversation and to a study. Any new legislation should clarify and not confuse, he added. Finally, Wittenwyler noted that the Great Dane needs immediate relief and that, if the legislation is pushed to the next session, litigation is likely.

The matter was closed at 14:24.

To begin my closing remarks, I'd ask that you watch a couple short videos. They're Quicktime and each photo is an active link.

Russ Klisch of Lakefront and president of the Wisconsin Brewers' Guild.



Eric Jensen and Michael Wittenwyler speaking in favor of the bill for the distributors of the state.


Now, I realize that these videos aren't perfect and don’t give the full speeches but look at what they show – the two sides are miles apart. Notice how Klisch talks about the brewers of Wisconsin and they're desire to grow and to try to be in a position to overcome future challenges. Contrast this with Wittenwyler who talks about litigation and the influence of out of state retailers. The distributors wore suits while the brewers were casually dressed. Jim McCabe spoke at one point about how Dan Carey of New Glarus Brewing takes his Belgian ales across The Pond and beats the Belgians at their own game. The brewers are not only fighting for their businesses, but they're also asking for the government's help in furthering their craft and the reputation of Wisconsin beer. McCabe also said that, if the government allows the brewers to expand instead of restricting them with the provisions of this law, they will make Wisconsin the premier craft brewing state which will be a boon for tourism. The distributors, on the other hand, spoke a lot about fear – fear of law suits from Costco – and they pushed the blame onto the courts, specifically the Supreme Court and the Granholm decision. It should also be noted that Wittenwyler authored a similar bill affecting Wisconsin wineries.

As far as the videos go, I must emphasize just how late the brewers in opposition got in the game. That the head of the Brewers' Guild was shut out the process until very recently seems quite unfair. And this coupled with the "stealth" introduction of the legislation on the day before a federal holiday smacks of underhanded maneuvering on the part of the distributors. A big question is how does current law and this proposed legislation fair in light of the Granholm decision? That is something I cannot answer. While I would certainly concede that current law may be vulnerable to litigation, upon reading the SCOTUS Blog entry on the Granholm decision linked to above, exactly how the Brewpub Tourism Development Act would shore up the defenses is not clear to me at all.

Michael Horne at Milwaukee World has made a couple interesting observations:

Probably the guy in the biggest fix is Sen. Jeff Plale of Milwaukee. His district includes the Milwaukee Ale House, but is poised to gain two more restaurants as Hinterland Brewing Co. of Green Bay and Fratello’s of Oshkosh plan to open in the Third Ward. The bill could throw some monkey wrenches into both Fratello’s, which is owned by the same firm as the Fox River Brewing Co., and in Hinterland’s plans to operate here.

In a final irony, Governor Doyle has said he would sign the bill if it passes. Russ Klisch thought it was amusing that among the most recent fundraisers the governor has held in Milwaukee, one was at his Lakefront Brewery, and the other was at the Milwaukee Ale House.


And earlier today Rob Larson of Tyranena reflected on the hearing and offered this tale:

Wednesday received a phone call from a panicked brewery-under-construction in Wausau who just heard about the "Milwaukee Beer Party" who was concerned about the implications of this bill... a bill he had never heard of that would have great implications on his business. Why he called me of all people is beyond me, but... In any case, this brewery sounds like they are planning on being like the Ale Asylum with a small restaurant and distributing their beers. However, it does not sound like they would meet the minimum 40% non-alcohol sales limitation to qualify for a brewpub... and the new law would prevent new breweries from getting a restaurant license. Here is a guy that has sunk a lot of time and money into a business venture and may have his opportunities stolen from him by this so called "Brewpub Tourism Development Act."

As he also noted, standing outside the hearing room, one of the brewers said, "We should really have a celebratory beer but after listening to those lobbyists I feel slimy and just want to take a shower." In addition to this comment, the same person also expressed disgust at how the committee gave the distributors a virtual pass when it came to questions while those speaking against the bill were asked to explain their views more fully and justify statements.

At the end of the day, the brewers could claim a small victory with the committee having decided to delay any executive action, i.e. – not vote on it. Next week will bring more discussion to bring the two sides closer together.
|| Palmer, 10:36 PM

2 Comments:

Fantastic reporting from the "front lines!"

I admit that I didn't know much about this bill except that I wanted Great Dane to be able to serve their own beer at a third location.

A few years ago at a beer tasting event I asked the GD representatives when they were going to open a Great Dane in Milwaukee. They told me “never” because of law on the books that says you can only open 2 brew pubs. Then when I heard they opened the Hilldale Mall location, I figured the law must have been changed. I was quite surprised when I went to the new restaurant to find that they couldn’t serve their own beer.

It seems simple enough really – why on earth would Wisconsin try to limit someone’s business – especially with Wisconsin’s great beer brewing tradition?

But like most government plans this bill has its bureaucratic problems. I don’t think Great Dane should necessarily be vilified here though – they took the initiative to get the old stupid law changed. The rest of the small breweries were asleep at the wheel and complained way late in the game. Now GD feels like they’re trying to pass the best bill they can at this time. But I really want to see this work out for ALL parties. With a few changes, the bill could be a good one. I want to have TONS of Wisconsin microbrew choices and TONS of brew pub restaurants to visit.
Anonymous Alba, at 4:08 PM  
Alba - thanks for dropping by and for your kinds words.

I don't want to vilify the GD either and I don't think that the brewers do. After the hearing, a couple of them said they were going to the GD for a beer and to relax. However, my impression is that there's some frustration.

There are further discussions this week and I recall that Jim McCabe was to be involved.
Blogger Palmer, at 8:11 AM  

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