Wisconsin Senate Majority Leader Scott Fitzgerald, R-Juneau, said Thursday he sees no tension in a bill to enforce the state's liquor laws while at the same time offering a carve-out to one the state's largest resorts to operate outside of the current regulations.
Fitzgerald's plan would establish an Office of Alcohol Beverage Enforcement, a new entity within the state Department of Revenue, which regulates and enforces the rules on how liquor is made, distributed and sold to the public. The office would have the power to write administrative rules, hire more enforcement agents and would be run by an an appointee of Gov. Scott Walker rather than a Department of Revenue official.
The bill also includes the creation of a “resort manufacturer permit” to suit Kohler Co. The new permit would allow a business that meets certain conditions to manufacture, bottle, store and sell up to 150,000 gallons of intoxicating liquor per year on the entity’s premises. It would also allow Kohler to sell beer or intoxicating liquor that it does not produce on its premises without a retail license and sell its spirits to a related business, deemed a "secondary resort facility."
The creation of a new permit for Kohler would be an expansion of the state’s three-tier system, the series of laws that regulates how alcoholic beverages are manufactured, distributed and sold in the state. Under the current system, those who manufacturer intoxicating liquor must sell it to a wholesaler, which then can sell it to retailers for the general public to buy.
Kohler launched a line of chocolate brandy in 2016 that it wants to be able to sell at its resorts. The bill's language narrowly defines what constitutes a resort, apparently to uniquely suit Kohler.
Dozens of craft brewers, wineries and distillers across the state, along with the state chapter of Americans For Prosperity, oppose the bill, saying it gives special treatment to a large corporation at the expense of small business owners who need clarification and less government regulation in order to grow their businesses in Wisconsin.
The bill, is a "giant leap in the wrong direction," said Eric Bott, president of Americans for Prosperity in Wisconsin. Bott, along with dozens of brewers and distillers packed a Capitol hearing room Thursday as lawmakers considered the plan, Senate Bill 801.
"SB 801 is designed to expand the gulf between the haves and the have-nots," Bott said. "That's its purpose."
Fitzgerald said the aim is to more effectively enforce state law and said he does not see the Kohler provisions as an exemption from it.
"We currently have laws on the books in Wisconsin and they’re just not being enforced. I think that’s what the concern is from those who support the bill right now, the Tavern League, the wholesale beer distributors," he said.
There was no representative from the state Department of Revenue at the hearing Thursday to speak about the state of enforcement in Wisconsin, but Fitzgerald said “just about every entity” is taking advantage of the three-tiered system.
When asked how enforcement piece of the bill fits with the special provisions for Kohler, Fitzgerald said, "Oh yeah, it’s a carve out....I don’t think it’s a big exemption. It’s a small thing compared to what you could do to the three-tier system."
Fitzgerald said Kohler is distinct from other businesses in the state that are skirting alcohol laws.
"The other entities I mentioned are a part of the three-tiered system, so they’re watching the rest of the bill from the perspective on what impact does that have on them," he said. "I know who called them all and asked them to come today. It was Americans for Prosperity. I’m not sure what their link is.”
Bott said the bill is bad policy, which has motivated alcohol companies of all political stripes.
“It’s kind of the senator to credit us with bringing 50 craft beverage producers to Madison today, but we can’t take all the credit," he said. "This is organic grassroots activism against bad public policy.”