Microbreweries Hopping Mad Over Legislation

A fight brewing over beer in Wisconsin pits the growing market of craft brewers against a large, well-known brewer.

The Legislature’s Republican-controlled Joint Finance Committee recently approved an amendment to the state budget that could change the way beer is sold in this state.

The proposal supported by MillerCoors and the Wisconsin Beer Distributors Association combines the brewer’s permit and wholesale and retail licenses given out by municipalities into one permit under state control.

It would ban brewers from purchasing distributors — something craft brewers say they might need later to avoid getting squeezed out of the market by large corporate brewers.

Jeff Hamilton, president of the Wisconsin Brewers Guild and Sprecher Brewing Co. in Milwaukee, said the big guys are trying to limit growth of craft brewers.

“When I started this brewery in 1993, it was not state law that you had to use a wholesaler,” said Deb Carey, the owner of the New Glarus Brewing Company. “But I did choose to use wholesalers, and I do use them now because it makes good business sense to me.”

The budget amendment would allow microbreweries like the New Glarus Brewing Company to sell its own beer to retailers.

But it eliminates microbreweries’ ability to get a wholesalers license, meaning that they couldn’t grow their business by distributing beer for other breweries.

“It’s very threatening to small brewers,” said Carey. “Small brewers are less than 5 percent of the beer sold. However, we’re growing at a really fast pace, double digit growth for a multitude of years. And some of the major domestics like Miller have been slowly dwindling, so they saw an opportunity here for themselves and they’re taking it.”

In a statement, MillerCoors denies initiating this legislation, saying that the legislation prohibits brewers — big and small — from owning and operating multi-brand businesses in brewing, distributing and retail.

Tim Roby, spokesman for the Wisconsin Beer Distributors Association, said the proposal keeps Anheuser Busch from buying a distributor and only selling its own beer to retailers.

Fans of specialty brews said they’re concerned about the proposal.

“I’m just concerned about a lack of competition, in general, in the United States,” said Kevin Schwendinger. “This is one more example where I feel that small businesses are getting the short end of the stick in terms of how they perform and how they can perform their job to the public.”

“If you have to go through a distributor, plus you’re going to jack the cost up for retailers or for consumers at the end level,” said Paul Leuthe. “For me, I don’t like it at all.”

The New Glarus Brewing Company brews more than 100,000 barrels of beer a year. Carey said the amendment will hurt the craft beer industry.

“Let brewers make beer. Let them negotiate relationships with wholesalers when it’s to their advantage. If not, they can start their own distribution and take the beer directly to the store themselves,” said Carey.

The MillerCoors statement goes on to suggest to the state’s small brewers “who oppose this legislation or fail to understand history are destined to repeat it.”

The Legislature is scheduled to begin debate on the state budget on Tuesday.