Microbrewery Fears Budget Measure Could Affect Shorewood Tasting Room

Big Bay Brewing Co. is joining microbrewers around the state who are worried about the effect of a provision in the state budget bill that bans beer-makers from also distributing their beverage.

The Milwaukee-based beer brewer runs a tasting room in Shorewood, 4517 N. Oakland Ave., and owner Jeff Garwood says he's afraid about its future if Gov. Scott Walker doesn't veto the provision.

"My tasting room, because it's not part of a brewery operation, could be shut down," Garwood said.

The provision, which bans brewers from owning distributorships, is part of the 2011-13 budget that Walker plans to sign on Sunday.

State legislators who oppose the measure also say it would also ban brewers from owning taverns.

On Wednesday, a bipartisan group of lawmakers, including state Sen. Glenn Grothman (R-West Bend) asked Walker to veto the provision.

“Wisconsin is known for its breweries, and allowing small craft brewers to own their own taverns will highlight their product,” Grothman said in a statement. “This is the type of provision that should have been dealt with in a separate bill. It was complicated and the thriving craft brew industry did not participate in drafting this provision.”

State Sen. Robert Jauch (D-Poplar) even though he's a member of the Joint Finance Committee, the Legislature's budget-writing committee, he didn't have enough information before he was forced to vote on the provision.

But a spokesperson for Sen. Alberta Darling (R-River Hills), the committee's co-chair, said the measure was drafted to ensure Wisconsin's so-called three-tier system stays in place. In that system, brewers make the beer and sell it to independent distributors, who then resell it to retailers and taverns.

The Journal Sentinel reported that the provision was put into the budget to stop Anheuser-Busch from buying wholesale distributors. Last year, Anheuser-Busch won a court challenge to an Illinois law that barred out-of-state brewers from owning beer wholesalers and supporters of the budget provision are concerned the same thing could happen in Wisconsin, the newspaper said.

Big Bay uses Milwaukee Brewing Co. to brew its beer and is licensed as a distributor but Garwood says he believes in and uses the three-tier system. Big Bay contracts out its distribution needs and — except for the Shorewood tasting room — doesn't sell its own product.

"We made the choice of going through the distribution network because we had a certain type of business plan," Garwood said. "If I was a smaller brewer...it wouldn't be worth my while to go through the distribution system."

Despite Garwood's concerns, Darling's spokesman, Bob Delaporte, said the measure wouldn't affect Big Bay's tasting room. Current law allows a brewer making less than 50,000 barrels per beer per year to sell its own beer, but under the new provision, that would increase to 300,000 barrels. Garwood said Big Bay does not produce more than 300,000 barrels of beer.

Grothman told Patch Friday he believes the tasting room will not be affected by the budget measure because it isn't a traditional tavern which would sell other brewer's beer.

Big Bay is a one of many members of the Wisconsin Brewers Guild that have voiced opposition to the budget measure, saying it limits their business from growing. Garwood said he doesn’t necessarily believe the bill limits small brewers from growing, but that it isn't good for small business in Wisconsin.

“It seems very anti-competitive and very anti-small business,” he said. “I don’t know how people can look at this and say, ‘It’s good for small business; this is good for Wisconsin brewers.' "

He said it’s clear the bill was drafted to protect MillerCoors from the nation’s largest brewer St. Louis-based Anesher-Busch moving into the state, buying out distributors and dominating the market.

Garwood said he hasn't had enough information either and he wondered why Big Bay or other craft brewers weren't part of the discussion or debate.

Correction: The original version of this story incorrectly stated Big Bay Brewing uses Miller Brewing to brew its beer. Big Bay partners with Milwaukee Brewing Co. to brew its beer. (Story updated at 9:10 p.m. June 24.)