Proposed Craft Brew Rules Would Kill New Brewery in the Cradle

Joint Finance Committee member, State Representative Dale Kooyenga, declared as dead this week a proposal that would prohibit craft brewers, wineries and distilleries from selling their product directly to customers. If the proposal is included in the state budget, it would set up a new regulatory body to oversee the alcoholic beverage industry and would mean producers of craft alcohol products would have to sell them to distributors and buy them back, rather than directly to the customer by the glass, growler or bottle.  If Kooyenga’s assessment is accurate, it’s welcome news to the owner of a craft brewery/restaurant that opened its doors in Green Bay on June 1.

You likely know Wisconsin as the “Badger State.” But  it was  known as the “Copper State” in the 19th century, until the metal was largely mined out. It was that history that inspired Gregg Mattek to call his company Copper State Brewing. Mattek learned that Hinterland Brewing would be relocating from its historic downtown Green Bay building to the Green Bay Packers’ Titletown District and he saw an opportunity:

My cousin owns coffee shops in the Appleton area and was looking to expand in the Green Bay area. His realtor had the Hinterland building. There is no better opportunity than walking into an established brewery and buying something turnkey and just walking in. We bought the building and equipment two years ago. They(Hinterland)ended up being our tenant. We were their landlords. We sent an employee to brew school. He spent 9 months working with Hinterland as a brewing apprenticeship.

We have about 30 employees right now. We continue to grow our beer production and will start looking at expanding down into Appleton and putting up additional taprooms, which we’re able to do under the current law. Being able to double that number(of employees) is all part of our plan.

But Mattek says that none of that will happen if the controversial proposal becomes law:

Holy cow man. I mean when we saw this, our first reaction was it would entirely kill our business. We consider ourselves a hyper local craft brewery; serving the market we live in, you know.  Recreating what Wisconsin use to have. Neighborhood bars where you got to know your customers and they got to know you. It’s all built off the financial plan of selling our own product.

If we make our own beer and rather than be able to sell it directly to our customers and instead have to  sell it to a distributor and buy it back from them would absolutely kill the model that we built our business on.

That’s why Mattek was relieved when he saw what WKOW TV in Madison reported this week:

Rep. Dale Kooyenga (R-Brookfield) told 27 News Tuesday there is no appetite among Republicans who sit on the Joint Finance Committee to create an agency that kills entreprenuership.

“I think it’s very unlikely, in fact, I know it’s not gonna happen that there will be changes of those nature in the budget,” said Rep. Kooyenga. “I really have to credit the wineries and the distilleries and the breweries, because what they’ve done is they got organized and they got their voice heard. And that did it – not by hiring a bunch of lobbyists – they did it by contacting legislators and having their customers contact legislators.”

Opponents feared the proposal would slipped into the budget at the last minute in what is known as the 999 motion, the final motion made on the state budget. No one has claimed responsibility for the proposal, first unearthed by Americans For Prosperity. But many in the craft beer industry suspect the Tavern League of Wisconsin and/or the Wisconsin Beer Distributors Association may be involved, fearing competition from the craft brew industry. Mattek says he can understand why bars consider it unfair that they have to go through a distributor and craft brewers don’t. But he adds: “We have well over a million dollars in overhead in production equipment that retail sellers would never have to consider.”

At this point Mattek is hopeful that Kooyenga’s prediction comes true and that the fledgling Copper State Brewing Co.  will grow into the dream he envisioned when he took an entrepreneurial risk two years ago.