Wednesday, April 20, 2011

Complications Arise Around Public Homebrew Consumption

***NOTE: The following is not legal advice. It is intended solely for informational purposes. If you have any questions please contact an attorney.***


There are two provisions of the Wisconsin Statutes that provide exemptions for homemade fermented malt beverages and/or wine, commonly called "Homebrew". The first is Wisconsin Statute §125.06(3) which states:
No license or permit is required under this Chapter for: ... The manufacture of wine or fermented malt beverages of any alcoholic content by any person at his or her home, farm, or place of residence if the wine or fermented malt beverages is [ed note: sic] to be consumed by that person or his or her family or guests, and if the person manufacturing the person manufacturing the wine or fermented malt beverages receives no compensation.
We'll come back to this in a minute. The other relevant statute prevents homebrew from being taxed as other alcoholic beverages are. Wisc. Stat. §139.04(1):
No tax is levied ... in respect to: ... Making of wine, cider, or fermented malt beverages at home solely for consumption therein and use thereof in such home by the family and guests without compensation.
Taken together, these law comprise the Homebrew Laws of the State of Wisconsin. Interestingly, the tax code cleans up a "problem" of the license code. If you notice, the license provides an exemption for beer made at home and states that it must be consumed by the family or guests, but does not state that the consumption must take place at the home. Though this is strongly implied, a strict reading of the statute says only that the beer must be manufactured at a home, farm, or residence and that it must be consumed by "that person or his or her family or guests" - the consumption is not linked the place of manufacture. The tax code makes this more explicit by requiring consumption "therein." However, consider the following situation:

A homebrewer makes 2 5-gallon batches of beer at home and one batch is consumed (a) at home and the other is consumed (b) not at home (at, say, an art gallery where the homebrewer provided the beer for a private art-show by the homebrewer's wife). In neither instance would the homebrewer need to be licensed by the state. However in the second instance, the homebrew might be taxable (at $1 per barrel or about $.15 for a standard 5 gallon homebrew size), where in the first instance it would not. Strange result.

So, what is the point in all of this? Homebrewing has become increasingly popular. So popular in fact that the Roster for the Madison Homebrewers and Tasters Guild, Milwaukee has multiple homebrewing clubs, and even towns like Sun Prairie and Mount Horeb have sizable and active homebrewing clubs. According to BBLodge.info (itself run by a Milwaukee homebrew club) there are around 27 homebrewing clubs around the state.

As a celebration of this fast-growing hobby, the Great Lakes Brewfest in Racine, WI had held a homebrewing demonstration where it invited homebrew clubs to come and share their enthusiasm for homebrewing and serve samples of their brews. This has gone on every year, but this year the Brewfest got a message from the State of Wisconsin Department of Revenue stating that homebrew could not be served. Indeed, MHTG events have, not surprisingly, regularly featured homebrew (though not at the Great Taste of the Midwest).

In planning events for Madison Craft Beer Week we had numerous requests for homebrew demonstrations. These requests, by places such as Whole Foods, The Madison Club, and The Malt House, resulted in consulting the Department of Revenue Alcohol Tobacco Enforcement Division for an Official Comment regarding serving homebrew in public places. The official position is this: You can serve homebrew at private events held at facilities that do not hold a liquor license.

You can see how this reinforces the statutes, but seems to follow the more lenient licensing statute. It is not entirely clear what the tax implications would be since complying with the official position would technically allow you to serve homebrew outside of a home (e.g., at an art gallery) thus pulling the homebrew outside of the tax exemption. Admittedly, it would difficult to monitor and enforce such events and the amounts that could be recovered would hardly be worth the effort.

In the meantime, homebrew clubs around the state are looking to band together to reform the laws to allow homebrewing demonstrations and serving homebrew in public places. This could be problematic since these are not government inspected or licensed premises or products. Though careful wording of waivers could help to alleviate some of the concerns. Moreover, common sense, and, frankly, quality, would help to mitigate any issues with "competition" that distributors might have.

Finally, keep in mind - demonstrating how to homebrew is not against the law. Only serving the homebrew itself. Arguably, fermenting (what makes beer a regulateable "fermented malt beverage") cannot be done anywhere other than a residence, so public homebrew demonstrations might have to work-around that. But this is not the death of homebrew demonstrations, only the death of serving homebrew in public.

4 comments:

  1. So you could serve up some homebrew at whole foods or Madison club if the event was "private?" What constitutes public vs private in these instances?

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  2. Whole Foods insn't the best example since they have a license to sell/sample alcoholic beverages. But, any any alcoholic product they sample must be supplied through a distributor.
    A business that has a liquor license can't 'serve' homebrew for that reason also. The state requires all alcoholic product to be invoiced from a distributor (proof is required on site).
    Private event would be a group renting a space at a convention center that allows outside catering/consumables to be brought in, or using a meeting room at a church or community center for their group event that isn't open to the public.
    Cheers!

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  3. God, i hate laws. Especially when they restrict us homebrewers like this, whilst corruption runs rampant in the distribution and licensing world, affected such simple things as which beers make it to store shelves.

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  4. Just to be clear, this isn't about distributors, it is about a narrow-minded, literal and repressive interpretation of the law by certain people in the state government. The distributors aren't influencing the interpretation of the law, at least not directly - to do so would be very illegal.

    Again, this is everything to do with repressive interpretation of unclear laws. The best thing to do is follow Oregon's example, and get the law changed.

    ReplyDelete

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