125.33 Restrictions on dealings between brewers, brewpubs, wholesalers, and retailers.
(1) Furnishing things of value.
(a) Except as provided in this section and s. 125.295, no brewer, brewpub, or wholesaler may furnish, give, lend, lease, or sell any furniture, fixtures, fittings, equipment, money, or other thing of value to any campus or Class “B" licensee or permittee, or to any person for the use, benefit, or relief of any campus or Class “B" licensee or permittee, or guarantee the repayment of any loan or the fulfillment of any financial obligation of any campus or Class “B" licensee or permittee. Such actions may not be taken by the brewer, brewpub, or wholesaler directly or indirectly, or through a subsidiary or affiliate corporation or limited liability company, or by any officer, director, stockholder, partner, or member thereof.
(b) No brewer, brewpub, or wholesaler may enter into any agreement whereby any campus or Class “B" licensee or permittee is required to purchase the fermented malt beverages of any brewer or brewpub to the exclusion of those manufactured by other brewers or brewpubs. Such contracts may not be entered into by the brewer, brewpub, or wholesaler, directly or indirectly, or through a subsidiary or an affiliate corporation or limited liability company, or by any officer, director, stockholder, partner, or member thereof.
(2) Exceptions. Notwithstanding the prohibitions in sub. (1), a brewer, brewpub, or wholesaler may:
(a) Give to any campus or Class “B" licensee or permittee, at any given time, for placement inside the premises, signs, clocks, or menu boards with an aggregate value of not more than $2,500. If a gift of any item would cause the $2,500 limit to be exceeded, the recipient shall pay the brewer, brewpub, or wholesaler the amount of the item's value in excess of $2,500. Each recipient shall keep an invoice or credit memo containing the name of the donor and the number and value of items received under this paragraph. The value of an item is its cost to the donor. Each recipient shall make the records kept under this paragraph available to the department for inspection upon request.
(b) Give to any campus or Class “B" licensee or permittee any of the following:
1. Fermented malt beverage tap knobs.
2. Signs made from paper, cardboard, plastic, vinyl, or other like material for placement inside the premises, notwithstanding the aggregate value limitation of par. (a).
(c) Sell at fair market value to a campus or Class “B" licensee or permittee miscellaneous advertising matter, the items specified under pars. (a) and (b), nonmechanical coolers and tavern supply items used in the consumption of food or alcohol beverages.
(d) Sell to a campus or Class “B" licensee or permittee at fair market value equipment designed and intended to preserve and maintain the sanitary dispensing of fermented malt beverages or any services necessary to maintain this kind of equipment. A brewer, brewpub, or wholesaler shall charge the same price per unit of equipment to each campus or Class “B" licensee or permittee making the same or a similar purchase, and shall charge the same rate to each campus or Class “B" licensee or permittee purchasing maintenance services under this subdivision. Each brewer, brewpub, or wholesaler shall keep records of each transaction under this subdivision and shall make the records available to the department upon request.
(e) Sell at fair market value or maintain for a fair consideration dispensing equipment such as direct draw boxes, novelty boxes, coil boxes, beer storage boxes or tapping equipment, none of which may include bar additions, to campuses or Class “B" licensees and permittees for cash or on credit for not more than 2 years. Credit sales of equipment shall be evidenced by a written contract stating the terms, conditions and monthly payments. Within 10 days after the execution of the contract, the seller shall record the contract with the register of deeds for the county in which the equipment is installed.
(f) Sell consumable merchandise intended for resale, including the sale or loan of containers thereof, to campuses and Class “B" licensees and permittees in the regular course of business.
(g) Purchase advertising and other services and rights for a fair consideration from any corporate Class “B" licensee or permittee who is a member of a regularly established athletic league and whose principal business is the ownership, maintenance and operation of a professional athletic team playing a regular schedule of games and whose principal source of income is derived from the sale of tickets to games played by such teams.
(h) Contribute money or other things of value to or for the benefit of a nonprofit corporation, exempt under section 501 (c) (3) of the internal revenue code, as defined in s. 71.22 (4), which is conducting festivals of limited duration in a 1st class city if the festivals are sponsored and endorsed in whole or part by a municipal corporation.
(hm) Contribute money or other things of value to or for a nonprofit corporation which conducts an autumn ethnic festival of limited duration in a 2nd class city that had a population in 1986 of at least 49,000 but less than 50,000, if that festival is sponsored and endorsed in whole or part by that municipal corporation.
(i) Lease or lend furniture, fixtures, fittings and equipment to any person in possession of a Class “B" premises where the furniture, fixtures, fittings and equipment were installed on the Class “B" premises prior to May 24, 1941. Any brewer or wholesaler who repossesses any furniture, fixtures, fittings or equipment leased, lent or sold to any Class “B" licensee or permittee may sell them to any Class “B" licensee or permittee, for cash on delivery only, and shall deliver a bill of sale to the purchaser. Any application for a Class “B" license or permit after May 24, 1941, shall contain an affidavit by the applicant, setting forth the ownership of the fixtures in or attached to the premises and if the fixtures are not owned by the applicant, the manner, terms and conditions under which the fixtures are held.
(j) Contribute money or other items of value to, or purchase advertising from, an institution of higher education which is exempt under section 501 (c) (3) of the internal revenue code, as defined in s. 71.22 (4), if the contribution or purchase is for a purpose other than the use, benefit, or relief of premises or operations for the sale of fermented malt beverages and is not contingent either upon the use of the product of the brewer, brewpub, or wholesaler by the institution or upon an agreement by the institution wholly or partly to exclude from sale the products of a competing brewer, brewpub, or wholesaler.
(k) Contribute money or other items of value, or purchase advertising from, a campus if the contribution or purchase is for a purpose other than the use, benefit, or relief of premises or operations for the sale of fermented malt beverages and is not contingent either upon the use of the product of the brewer, brewpub, or wholesaler by the campus or upon an agreement by the campus partly or wholly to exclude from sale the products of a competing brewer, brewpub, or wholesaler.
(L)
1. Purchase advertising for a fair consideration from a bona fide national or statewide trade association that derives its principal income from membership dues of Class “B" licensees.
2. Purchase advertising from a person who does not hold a license under this chapter and who conducts national or regional sweepstakes, contests, or promotions on the premises of Class “B" licensees or permittees that sell the brewer's, brewpub's, or wholesaler's products. The person may promote an event or activity in connection with a sweepstakes, contest, or promotion, including promoting the location of the event or activity, if the Class “B" licensee or permittee on whose premises the event or activity will occur does not receive money for hosting the event or activity and, except as provided in subd. 4., if the advertising for the event or activity identifies at least 4 unaffiliated Class “B" licensees or permittees.
3. Conduct national or regional sweepstakes, contests, or promotions on the premises of Class “B" licensees or permittees that sell the brewer's, brewpub's, or wholesaler's products. The brewer, brewpub, or wholesaler may promote an event or activity in connection with a sweepstakes, contest, or promotion, including promoting the location of the event or activity, if the Class “B" licensee or permittee on whose premises the event or activity will occur does not receive money for hosting the event or activity and, except as provided in subd. 4., if the advertising for the event or activity identifies at least 4 unaffiliated Class “B" licensees or permittees.
4. A brewer that manufactures less than 30,000 barrels of fermented malt beverages annually, or a brewpub, may purchase advertising under subd. 2., and may promote sweepstakes, contests, or promotions through advertising under subd. 3., if the advertising identifies at least one Class “B" licensee or permittee.
(m) Purchase products from a Class “B" licensee or permittee.
(n)
1. Provide, in this state, reasonable business entertainment that is deductible under section 162 of the internal revenue code to a Class “B" licensee or permittee by doing any of the following:
a. Providing tickets or free admissions to athletic events, concerts or similar activities.
b. Providing food and beverages and paying for local ground transportation in connection with activities described in subd. 1. a. and business meetings.
2. Notwithstanding subd. 1., no brewer, brewpub, or wholesaler may provide business entertainment to a Class “B" licensee or permittee under subd. 1. in one day that has a value exceeding $500, and no brewer, brewpub, or wholesaler may provide business entertainment to a Class “B" licensee or permittee under subd. 1. on more than 8 days in any calendar year.
(o) Furnish, free of charge, on Class “B" premises, taste samples of fermented malt beverages to any person who has attained the legal drinking age and who is attending a trade show, conference, convention or similar business meeting, that is held on those premises, of a bona fide national or statewide trade association that derives income from membership dues of Class “B" licensees. Taste samples may not be furnished under this paragraph at more than 2 such events of any one trade association per year. No fermented malt beverages brought on Class “B" premises under this paragraph may remain on those premises after the close of the trade show, conference, convention or business meeting.
(p)
1. Have present not more than 3 individuals representing the brewer or brewpub at a fermented malt beverages tasting event that lasts 2 days or less and at which taste samples of fermented malt beverages brewed or sold by at least 5 different brewers or brewpubs are offered for consumption by persons who either pay for the taste samples or pay a charge for admission to the event. Any individual representing a brewer or brewpub shall confine his or her activities on the premises to ensuring the integrity of, providing information about, and dispensing the brewer's or brewpub's fermented malt beverages.
2. No Class “B" licensee or permittee may allow more than one event described in subd. 1. on the premises within one year.
(2m) Exception for golf course. Notwithstanding the prohibitions in sub. (1), a wholesaler may have an interest in a corporation that owns and operates a golf course and leases premises on the golf course to the holder of a Class “B" license or permit for the premises, if the wholesaler's license and the Class “B" license or permit were originally issued to the corporation and to the Class “B" licensee or permittee before June 1, 1981. The wholesaler's license and the Class “B" license or permit shall be renewed annually upon application, unless revoked under s. 125.12. An application for a wholesaler's license to which this subsection applies shall have attached to it an affidavit stating the applicant's interest in the Class “B" premises.
(2s) Exception for retail trade association contributions. Notwithstanding the prohibitions in sub. (1), a brewer, brewpub, or wholesaler may contribute money or other things of value to a bona fide national, statewide, or local trade association that derives its principal income from membership dues of Class “B" licensees.
(3) Exemption for certain real estate. The restrictions contained in sub. (1) do not apply to real estate owned in whole or part on May 24, 1941, by any brewer or wholesaler, directly or indirectly, or through or by a subsidiary or affiliate corporation, or by any officer, director, stockholder, partner or trustee for any of the foregoing, or upon which any of the foregoing held a valid lien on May 24, 1941, or to any real estate owned in whole or part by any of the foregoing upon which there is or may be a hotel of 100 or more rooms.
(4) Commercial credit. Nothing in sub. (1) affects the extension of usual and customary commercial credits for products of the fermented malt beverages industry actually sold and delivered.
(5) Violations. Any licensee or permittee who is a party to any violation of sub. (1) or who receives the benefits thereof shall be guilty of the violation.
(6) Volume discounts to retailers. Wholesalers of fermented malt beverages, and brewpubs with respect to sales of fermented malt beverages authorized under s. 125.295 (1) (g), shall charge the same price to all campuses and retail licensees and permittees making purchases in similar quantities. Any discount offered on fermented malt beverages shall be delivered to the retailer in a single transaction and single delivery, and on a single invoice.
(7) Retail purchase credit restrictions.
(a) Restrictions on sales.
1. No fermented malt beverages retail licensee or permittee may:
a. Receive, purchase, or acquire fermented malt beverages from any wholesale permittee or from any brewpub acting under authority of s. 125.295 (1) (g), except for cash or credit for a period of not more than 15 days.
b. Receive, purchase, or acquire fermented malt beverages from any wholesale permittee, or from any brewpub acting under authority of s. 125.295 (1) (g), if at the time of the receipt, purchase, or acquisition he or she is indebted to any wholesale permittee or brewpub for fermented malt beverages received, purchased, acquired, or delivered more than 15 days earlier.
2. No campus or fermented malt beverage retail licensee or permittee may receive any fermented malt beverages on consignment or on any basis other than a bona fide sale.
(b) Restrictions on issuance of licenses and permits. No Class “A" or Class “B" license or permit may be issued to a person having an indebtedness for fermented malt beverages outstanding for more than 15 days. In each application for a Class “A" or Class “B" license or permit, the applicant shall state whether he or she has indebtedness for fermented malt beverages to any licensee, permittee, or brewpub which has been outstanding for more than 15 days.
(c) Brewpubs. For purposes of this subsection, a brewpub, when acting under authority of a retail license with respect to fermented malt beverages not manufactured by the brewpub, is deemed a fermented malt beverages retailer. This paragraph does not affect any provision of this subsection with respect to a brewpub acting under authority of s. 125.295 (1) (g).
(d) Penalties. A retail licensee or permittee who violates this subsection is subject to the penalties under s. 125.11 except that he or she may not be imprisoned. No brewer, brewpub, or wholesaler may be subjected to any penalty as the result of the sale of fermented malt beverages to a campus or retail licensee or permittee when purchased by the campus or retail licensee or permittee in violation of this subsection.
(7m) Conditional purchases. No Class “A" or Class “B" licensee may condition the purchase of fermented malt beverages from a brewer, brewpub, or wholesaler upon the furnishing by the brewer, brewpub, or wholesaler of any thing of value, other than the products purchased, to the licensee or to any person for the use, benefit, or relief of the licensee.
(8) Exclusive sales by wholesaler. A wholesaler may not sell or offer to sell a brand of fermented malt beverages exclusively to one Class “A" licensee or to a group of Class “A" licensees affiliated through common ownership, management or control, unless the brand of fermented malt beverages is produced by a brewer that produces less than 300,000 barrels of fermented malt beverages in a calendar year or by a brewpub.
(9) Campuses and retailers to purchase from wholesalers. Except as provided in ss. 125.29 (3m) (b) and (c), 125.295 (1) (g), and 125.30 (4), no campus or retail licensee or permittee may purchase or possess fermented malt beverages purchased from any person other than a wholesaler holding a permit under this chapter for the sale of fermented malt beverages. Any person who violates this subsection may be fined not more than $10,000 or imprisoned for not more than 9 months or both.
(10) Compensation for termination of wholesaler distribution rights.
(a) In this subsection:
1. “Brand" means any word, name, group of letters, symbols, or combination thereof, including the name of the brewer or brewpub if the brewer's or brewpub's name is also a significant part of the product name, adopted and used by a brewer or brewpub to identify a specific fermented malt beverage product and to distinguish that product from other fermented malt beverages produced by that brewer or brewpub or other brewers or brewpubs.
2. “Discontinued brand" means, with respect to a terminated wholesaler, any brand of fermented malt beverages for which a brewer, brewpub, brewer's agent, brewpub's agent, or holder of an out-of-state shipper's permit has terminated, cancelled, or failed to renew an agreement, whether oral or written, with the wholesaler to supply that brand.
3. “Successor wholesaler" means any wholesaler who enters into an agreement, whether oral or written, to obtain a supply of a brand of fermented malt beverages that is a discontinued brand, or otherwise acquires the right to act as a wholesaler for a discontinued brand, from a brewer, brewpub, brewer's agent, brewpub's agent, or holder of an out-of-state shipper's permit for purposes of selling the discontinued brand in a specifically defined territory, if the discontinued brand was sold by a terminated wholesaler in any portion of this same territory at a time immediately before the brand of fermented malt beverages became a discontinued brand.
4. “Terminated wholesaler" means a wholesaler with whom a brewer, brewpub, brewer's agent, brewpub's agent, or holder of an out-of-state shipper's permit has terminated, cancelled, or failed to renew an agreement, whether oral or written, to supply a brand of fermented malt beverages to that wholesaler.
(b) Except as provided in par. (c) and subject to pars. (d) and (e), a successor wholesaler shall compensate a terminated wholesaler for the fair market value of the terminated wholesaler's distribution rights to any discontinued brand of fermented malt beverages assumed by the successor wholesaler for the same territory, less any amount paid to the terminated wholesaler by the brewer, brewpub, brewer's agent, brewpub's agent, or holder of an out-of-state shipper's permit for the discontinued brand. If the terminated wholesaler's distribution rights to any discontinued brand of fermented malt beverages are divided among 2 or more successor wholesalers, each successor wholesaler shall compensate the terminated wholesaler for the fair market value of the distribution rights to any discontinued brand of fermented malt beverages assumed by that successor wholesaler for the applicable part of the same territory, less any amount paid to the terminated wholesaler by the brewer, brewpub, brewer's agent, brewpub's agent, or holder of an out-of-state shipper's permit for the discontinued brand. A terminated wholesaler may not receive under this paragraph total compensation from the successor wholesaler and brewer, brewpub, brewer's agent, brewpub's agent, or holder of an out-of-state shipper's permit that exceeds the fair market value of the terminated wholesaler's distribution rights specified under this paragraph.
(c) A successor wholesaler is not required to compensate a terminated wholesaler under par. (b) if the terminated wholesaler's agreement was terminated, cancelled, or not renewed for any of the following reasons:
1. The wholesaler or a principal of the wholesaler engaged in material fraudulent conduct or made substantial misrepresentations in its dealings with the brewer, brewpub, brewer's agent, brewpub's agent, or holder of an out-of-state shipper's permit or with others regarding any brand of the brewer, brewpub, brewer's agent, brewpub's agent, or holder of an out-of-state shipper's permit.
2. The wholesaler or a principal of the wholesaler was convicted of, or pleaded no contest to, a felony crime.
3. The wholesaler or a principal of the wholesaler knowingly distributed any brand of the brewer, brewpub, brewer's agent, brewpub's agent, or holder of an out-of-state shipper's permit outside the territory authorized by the brewer, brewpub, brewer's agent, brewpub's agent, or holder of an out-of-state shipper's permit for distribution of the brand.
4. The wholesaler or a principal of the wholesaler became insolvent or instituted bankruptcy proceedings, dissolved or liquidated the wholesaler's business, or assigned or attempted to assign the assets of the wholesaler's business for the benefit of creditors.
(d) If a terminated wholesaler and a successor wholesaler agree to the fair market value of the terminated wholesaler's distribution rights to any discontinued brand of fermented malt beverages assumed by the successor wholesaler for the same territory, the successor wholesaler shall pay the agreed upon sum to the terminated wholesaler within 30 days of the date on which the parties reach the agreement. If the parties cannot agree on the compensation due to the terminated wholesaler, upon written demand of either party, the parties shall submit their dispute for binding arbitration, subject to ch. 788, under the commercial arbitration rules of the American Arbitration Association if possible or, if not possible, by a nationally recognized arbitration association. The arbitration shall be conducted on an expedited basis to the extent an expedited proceeding is available. The arbitration shall commence within 90 days after the successor wholesaler obtains rights to receive a supply of a brand of fermented malt beverages, that is a discontinued brand of fermented malt beverages, of the terminated wholesaler, unless this time period is extended by mutual agreement of the parties or by the arbitrator. If the arbitrator awards compensation to the terminated wholesaler under this paragraph, the successor wholesaler shall pay the awarded compensation to the terminated wholesaler within 30 days of the date of the arbitrator's decision. The terminated wholesaler and the successor wholesaler shall each pay an equal share of the costs of arbitration.
(e) This subsection does not apply if the terminated wholesaler is a dealer, as defined in s. 135.02 (2), whose business relationship as to any discontinued brand constitutes a dealership, as defined in s. 135.02 (3) (a), as determined by a court of competent jurisdiction. Any arbitration proceeding under par. (d) shall be stayed pending this determination.
(11) Source of fermented malt beverages.
(a) Subject to s. 125.34 (3), no wholesaler authorized to make retail sales under s. 125.28 (1) (e) may sell a brand of fermented malt beverages to a retail licensee unless the wholesaler has an agreement for general wholesale distribution of that brand of fermented malt beverages with the brewer, brewpub, brewer's agent, brewpub's agent, or holder of an out-of-state shipper's permit supplying that brand.
(b) If a wholesaler violates par. (a), any other wholesaler aggrieved by such violation or the brewer or brewpub may bring an action against such wholesaler in any court of competent jurisdiction for damages sustained by the aggrieved wholesaler or the brewer or brewpub as a consequence of the violation, together with the actual costs of the action. Notwithstanding s. 814.04 (1), a wholesaler or the brewer or brewpub who prevails in an action under this paragraph may recover reasonable actual attorney fees incurred in the action.
(12) Providing taste samples on Class “A" premises. Notwithstanding s. 125.34 (6), with the consent of the Class “A" licensee, a brewer may provide, free of charge, on Class “A" premises, taste samples of fermented malt beverages to any person who has attained the legal drinking age for consumption on the premises during hours in which the Class “A" licensee is authorized under s. 125.25 (1) to provide taste samples or, if more restrictive, only during hours established by ordinance by a municipality under s. 125.32 (3) (d). The provision of taste samples under this subsection shall be subject to the same limitations that apply to taste samples provided by a Class “A" licensee under s. 125.25 (1). No brewer may provide as taste samples under this subsection any fermented malt beverages that the brewer did not purchase from the Class “A" licensee on whose premises the taste samples are provided. A brewer may provide taste samples under this subsection through an individual representing the brewer who is hired by the brewer and who is not employed by or an agent of a wholesaler. All provisions of this subsection that apply to a brewer apply equally to any individual representing a brewer.
(13) Wholesalers' source of supply. No wholesaler may purchase fermented malt beverages for resale unless the wholesaler purchases them either from the primary source of supply for the brand of fermented malt beverages sought to be sold or from a wholesaler within this state that holds a permit issued under s. 125.28. No wholesaler may sell fermented malt beverages purchased by the wholesaler to any other licensee or permittee under this chapter if the fermented malt beverages have not been purchased by the wholesaler from the primary source of supply or from a wholesaler within the state holding a permit issued under s. 125.28.
History: 1981 c. 79, 202; 1983 a. 26, 67, 68, 182, 192, 538; 1985 a. 15, 135; 1987 a. 308; 1989 a. 31, 253; 1991 a. 39; 1993 a. 112, 301; 1995 a. 320; 1997 a. 132, 166; 2001 a. 16, 38, 105; 2003 a. 303; 2005 a. 103; 2007 a. 9, 20; 2011 a. 32.
The selective discount ban under s. 66.054 (8a) (i) [now s. 125.33 (6)] is constitutional. State v. Kay Distributing Co., Inc. 110 Wis. 2d 29, 327 N.W.2d 188 (Ct. App. 1982).
Sub. (1) (a) prohibits a person from having an interest in real estate leased to a Class “B" licensee while also being a director, officer, or shareholder of a brewery. 77 Atty. Gen. 76.