Wednesday, October 24, 2007

I Was Going To Post About How Awesome Josef Is

But, instead, I should probably mention that yesterday the budget was passed. As part of the budget, an add-on bill was tacked on at the last minute by Gov. Doyle.

I'm sure you all see where this is going. Yes, you guessed correctly. That pork bill was SB 224. So, SB 224 is now law, with only the "minor" revision that eliminates the requirement that the restaurant be at least 40% of the brewpub income. The Great Dane can now brew at Hilldale. So, congrats. I suspect that you will see the first beers there by the end of the week.

In our prior posts about this topic, we've suggested that the Wisconsin Distributors have taken over the bill and turned it into something that may not be the best for brewers, but works very well for them to further cement the three-tier system. Comments in our last post suggest that the three-tier system is the greatest invention since sliced bread, being the sole force bringing all of the world's craft beer to our doorsteps.

I have a few comments about that.

First, we never said the three-tier system wasn't beneficial. It is a very useful system. The problem of this bill in particular, but the distributors in general, is that their political power further deprecates alternative methods of distribution. If the three-tier system is so awesome, why don't we have Stone, Alaskan, Brooklyn, Jolly Pumpkin, and other nationally distributed beers here? If the three-tier system is so awesome, why don't we have a greater diversity in our beer stores? If the three-tier system is so awesome why does the influence of Miller, Bud, Coors, et al determine what is available in our restaurants? Yeah. The restaurants count on the distributors to make recommendations (remember, even the CEO of Miller suggested that the biggest benefit of the distributors is that they know the local market so well). But the "recommendations" of the distributors are paid for by Miller, Bud, Coors, et al who provide incentives (either over the table, or under it) to ensure that their product gets recommended (seriously, there is no other reason that Miller Chill is still in stores).

If the three-tier system is so awesome why does it need specialized protectionist legislation?

Even despite all of that, our problem with this bill is not that it passed. Our problem is that it was passed in such an under-handed fashion. It was hardly debated. The revisions were not debated. It was appended at the last minute as a political favor on a budget that was under pressure to be passed. This small part of the budget wasn't going to prevent it from being passed. And, that, is our main problem with this bill. If after debate on its own merits, absent the influence and money of the distributors (or The Great Dane, or The Brewers Guild, or any other political action group for that matter), the senators and the assembly both passed this, it would signal a legitimate claim that reasoned discourse decided this was appropriate. But that's not what happened. Afraid that the bill couldn't pass on its own merit, the distributors took over the bill and shoved it down an unwitting public's throat.

As a result, small breweries will be severely limited in the options that they can undertake to grow their businesses. We have turned away novel distribution methods (e.g., Granite City) and we have hampered the regional competitiveness of one of the few vibrant portions of this state's economy. All because the distributors are afraid that if some brewery has a restaurant on their premises that this will somehow erode the three-tier system.

Well. Congratulations to The Great Dane. Seriously, they were just in this for themselves, and I can't say I blame them. They got, finally, what they wanted. This particular piece of legislation, though, is far from ideal. Yet, I can't help but wonder what solution would have arisen after reasoned debate.

========Edit==============
We're getting a lot of hits about this today, so I thought I'd invite all y'all to read up on everything we've done about SB 224 (The Great Dane Bill). If you click the tag at the end of this post that says "SB 224" you will see all of our posts on this subject. We've had a couple that lay out, in quite some detail, exactly what this bills does, and we also have interviews with Tyranena's Rob Larson and The Great Dane's Eliot Butler. Anyway. Thanks for reading! Keep coming back, we promise more about beer.

5 comments:

  1. You might want to remind readers to get in touch with WI Governor Doyle's office if they want to protest the addition of SB224. Governor Doyle does have veto powers for line items such as this.

    Here's the link to the contact form:
    http://www.wisgov.state.wi.us/contact.asp?locid=19

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  2. Lucy makes a good point but I'm afraid that contacting the governor at this point is a fool's errand. This proposal wouldn't have been added without his expressed approval.

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  3. Mike Horne of milwaukeeworld.com told me that he met with the governor and that Doyle did not understand the nuances of the bill, especially the brewer v. brewpub distinction.

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  4. So are Class B breweries prohibited from having a restaurant permit after this bill? Or was that taken out of the bill along with the 40% restaurant clause?

    If it wasn't taken out, then this bill sucks as any establishment with over 10,000 barrells can no longer sell food. BUT, if Class B places can still have a restaurant license, what is the big deal? Wouldn't this just amount to the original goal of of raising the 6 location barrel cap from 4000 to 10000? Isn't that a good compromise? Wasn't that the orignal goal that Rob from Tyranena wanted?

    If that is the case you can be a big Brewery with two restaurants, or a small brewery with 6 restaurants. Sounds like a compromise to me.

    Rob and this blog keep bringing up Goose Island, Great Lakes Brewing, and now Bear Republic as success stories that would never happen in Wisconsin now. How many locations with food does each of them have? If you can have two Class B licenese AND a restaurant license at each how will this bill change anything?

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  5. Just to respond to the anonymous. It is unclear what the grandfather provisions are. But what IS clear is that breweries over 10,000 barrels CANNOT hold a restaurant permit.

    Goose Island has many locations. Great Lakes has one. To my knowledge Bear Republic has one.

    So, no, you cannot be a big brewery with 2 licenses. You can still have a class B (sell liquor on premises) but you cannot have a restaurant license (nor can you hold BOTH a Class B AND a brewpub license, thus you must meet the full requirements for a brewpub to serve any prepared food at all). Thus, you can still have a tasting room.

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