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If you have stumbled across this article, you are most likely interested in starting a small craft beer brewery in Wisconsin. While it may seem straightforward, you have a great product and are ready to sell it; there are many legal considerations and hoops to jump through. Brewing beer in Wisconsin requires specific licensing that varies depending on how you store and distribute the beer. Do you want a brewpub or an actual brewery? What is the difference anyway? Do you want to offer your beer on-site, or would you like to be able to sell it to wholesalers? All of these questions, and more, need to be answered before you even begin the process of getting a license. Read on to find out more about the business laws related to craft brewing in Wisconsin.  

craft brewing beer

 

Wisconsin Craft Brewing

 

Craft brewing in Wisconsin is more popular than ever, with new breweries constantly popping up. If opening your own craft brewery in Wisconsin is your dream, there are several things you will need to know and achieve before you can even start to brew craft beer for sale to other people. There are state, federal and local laws regulating the creation and sale of craft beer. Brewing craft beer is one of the most highly regulated activities out there. Generally, the industry is broken into what is commonly called the “three-tier system”. The tiers are manufacturing, distribution, and retail. A craft brewery usually does at least two tiers: manufacturing and retail. A different state agency regulates each tier of the system.  

 

Manufacturing is regulated by the Wisconsin Department of Agriculture, Trade, and Consumer Protection, otherwise referred to as DATCP. This tier is also regulated on a federal level by the Alcohol, Tobacco, and Trade use agency, an agency of the US Department of the Treasury referred to as the TTB.  

 

The TTB also regulates distribution.  

 

The retail tier is regulated by local agencies, referred to as an Alcohol Review and Licensing Agency, which will differ in its requirements from community to community. They decide if the physical location of your brewery or brewpub is acceptable and if it meets local standards.  

 

All tiers are overseen in Wisconsin by the Wisconsin Department of Revenue. Keep in mind that everything you plan to sell as a craft brewer is subject to tax, with the amount of tax rising with the amount of product you plan to sell. It might be wise to keep distribution or sales small until you know what effect tax will have on your financial return.  

 

How Do I Start a Small Craft Brewing Business in Wisconsin?

 

The first thing you should do is consult with an experienced Wisconsin attorney. The process of starting a small craft brewery in Wisconsin is complex and time-consuming. Without proper legal guidance, you can waste a lot of time and money just trying to open your doors, let alone make your business profitable.  

 

With help from your attorney, you should form a business entity, like an LLC or a C-corp, to help protect your personal finances if something goes wrong. You will have to secure financing and a possible location for your small craft brewery, which may require dealing with local zoning ordinances. You will have to acquire the kind of brewing equipment that can accommodate how much beer you actually want to brew. All of these steps take time, money, and planning.  

 

After achieving the first set of goals in setting up your small craft beer brewery, you will need to start the licensing process. For more information on starting a small business in Wisconsin read our article, Getting Your Business Started in Wisconsin.  

woman opening small craft brewing business

How Do I Get a Brewing License in Wisconsin?

 

There is a reason that you need to secure financing, a location, and equipment before you apply for a brewing license. In order to get a license to brew craft beer in Wisconsin, you must apply with the TTB described above. The TTB requires that you submit a floor plan, secure a location, and order your equipment. Include that information with your application for a “brewers notice,” aka your brewing license. If you do not have equipment ordered, a location, and a floor plan drawn up, the TTB will not accept your application. The TTB will perform background checks on shareholders who hold 10% of the business or more, inspect safety plans, and inspect your equipment as well. Once the TTB has granted your brewers notice, you will then have to apply to the Wisconsin Department of Revenue for a brewpub or brewery permit.  

 

Wisconsin differentiates between a brewery and a brewpub. A brewery is limited by Wisconsin law as to who can hold an ownership interest in it. For example, if one owner holds an interest in a brewpub, they would be excluded from holding an ownership interest in a brewery.  

 

A brewery can manufacture beer, sell beer to wholesalers and store beer. A brewery can have a taproom on-site and a second taproom off-site. There is also regulation concerning having a restaurant connected to the brewery. The brewery will have a manufacturing center and a bottling line, and usually, the bulk of its product will be sold to wholesalers.  

 

A brewpub is basically just a restaurant with a brewery inside of it. While a brewpub can manufacture, it must always have a restaurant connected to the brewery. Brewpubs can also self-distribute, to some extent. Each license can be converted to another, if necessary.  

 

Once you decide on what avenue you want to take as far as licensing, brewery, or brewpub, then you can move forward with obtaining it and opening your doors for business.  

 

The main takeaway from this article is that you need to plan very carefully before you begin working on getting licensed as a brewery or brewpub. There are pros and cons for each type of license, and for either one, a great deal of financing and planning must be completed before you even try to get a license for a small craft beer brewery in Wisconsin. If you are considering opening a small craft beer brewery in Wisconsin, you should work with an experienced Wisconsin attorney who can advise you on the craft brewing laws in Wisconsin and how to make them work for you. If you need assistance, please feel free to give O’Flaherty Law a call; we would be happy to help you.

Disclaimer: The information provided on this blog is intended for general informational purposes only and should not be construed as legal advice on any subject matter. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship. Each individual's legal needs are unique, and these materials may not be applicable to your legal situation. Always seek the advice of a competent attorney with any questions you may have regarding a legal issue. Do not disregard professional legal advice or delay in seeking it because of something you have read on this blog.

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