It was a frightful new libation; a proposed law change to establish a state alcohol czar that had notes of a special carve-out for a generous political donor, muted tones of possible nepotism by the Senate majority leader, hints of possible threats to small distillers and, for good measure, the politicization of state regulations governing alcohol manufacturers, wholesalers, distributors and retailers.
Ahhh, what a fine bouquet — the Mad Dog 20/20 of legislation. Senate Majority Leader Scott Fitzgerald formally introduced the “alcohol czar” proposal earlier this month and fast-tracked it with a public hearing two days later and a hoped-for Senate vote before the week was out.
It turns out Fitzgerald was leading with his chin. Wisconsin likes nothing better than an alcohol-fueled brawl, and all the heavyweights lined up to get their licks in. MillerCoors, Anheuser Busch, the Wisconsin Winery Association and small craft breweries and distillers voiced their displeasure.
Faced with the outcry, Sen. Dan Feyen, Republican chairman of the Senate’s Economic Development committee, called for more study and cancelled the vote that week.
To be sure, Wisconsin’s three-tiered system of laws and regulations governing the making, distribution and sales of wine, beer and liquor has some warts. Chapter 125 of the state statutes is labyrinthian and difficult to understand and enforce. It was put in place in the 1930s, after Prohibition ended, to prevent monopolies from controlling the alcohol industry.
That has left manufacturers like the big breweries, distributors and wholesalers and taverns in an uneasy alliance of sorts in which they jealously guard their own business operations — and any changes in law that would short-change their interests.
Fitzgerald’s fast-track proposal would have set up a new Office of Alcohol Beverages Enforcement, headed by an “alcohol czar” with broad powers to issue alcohol permits, make warrantless arrests and confiscate illegal alcohol and also to develop administrative rules to govern the industry.
Fitzgerald said the state was not doing a good enough job regulating producers, wholesalers and retailers. He argued an alcohol czar appointed by the governor would be more responsive and give governors a chance to get involved if they needed to.
“If they see somebody going too far in enforcement, the governor could rein that in,” Fitzgerald said.
But the notion of politicizing alcohol enforcement was undercut by Fitzgerald’s proposal itself. The proposed legislation had a carve-out for Kohler American Resort, which would give it a special liquor exemption to distill and sell brandy directly from its resorts. Kohler Corp. Executive Chairman Herb Kohler has been a frequent contributor to Republicans, including Fitzgerald.
Added to that, Fitzgerald’s brother, former Assembly Speaker Jeff Fitzgerald, had signed up to lobby for the state’s wholesale wine and liquor sellers. Scott Fitzgerald acknowledged talking to his brother about the bill, but denied any improper influence.
The whole “spirited” debate comes against a background of change in Wisconsin’s alcohol industry, with more craft breweries popping up and small distilleries as well — there are now more than 30 small distilleries in Wisconsin. The Legislature opened the door for that in 2009, when it legalized on-site tasting rooms, which can provide up to 50 percent of revenue.
A recent article in Isthmus, a Madison news magazine, said that law change “came at the great displeasure of tavern keepers (the state Tavern League is 5,000 strong) and distributors, who saw these direct sales to consumers as impinging on their franchises.”
Wisconsin’s Chapter 125 statutes may well be in need of dusting off and reforming, but that will be a tricky process with a lot of stakeholders — brewery giants and big wholesalers to craft beer makers, small-batch distillers, wineries and taverns — all having their operations and livelihoods potentially affected.
They should all have a seat at the table as the Senate study proceeds. It could be a long and winding road, and it should be — not the half-baked, fast-track approach pushed by Fitzgerald. Here’s one for the road.