UPDATED 8:18 p.m.
MacIver News Service | Sept. 26, 2018
By M.D. Kittle
MADISON – While legislation remains to be ironed out, it’s clear that a majority of the Legislature’s Alcohol Beverages Enforcement Study Committee wants the state to regulate emerging players in the hospitality marketplace.
The 15-member committee on Wednesday agreed to pursue the creation of a new “consumption license or permit” for operators of wedding barns and similar businesses that have grown in popularity across the state.
“If you require a business to purchase a permit to remain operating and simultaneously support a quota system leaving zero permits available at any price, you are knowingly banning that business,” Bott said.
“It’s not a sales license, it’s a consumption license,” committee member Roger Johnson, who worked as the state’s top liquor law regulator for more than 30 years until his retirement in 2014, said during the nearly five-hour meeting. “This is a whole new license. It isn’t for selling, it’s for hosting events where alcohol is consumed.”
That category would fit the agriculture-themed event venue business, more specifically wedding barns. Many of the venues host wedding receptions and other events but do not directly sell or serve alcohol, leaving that task to their patrons.
Some alcohol sellers, including the members of the Tavern League of Wisconsin and the organization’s former president, state Rep. Rob Swearingen (R-Rhinelander), who happens to chair the study committee, don’t much care for wedding barns getting a break on licensing. At least that’s the way they see it.
Small business owners like Steve Nagy, operator of Homestead Meadows, a popular rural Outagamie County wedding barn, say the move to license is protectionism and cronyism at their worst, and a slap in the face to the free market.
“Never in my 62 years as (a) resident of the US—since arriving as a refugee from Hungary at the age of 12—have I witnessed such an unethical display of business protectionism disguised as a legitimate process to improve the laws!” Nagy wrote in a letter earlier this month to Senate President Roger Roth (R-Appleton).
Such sentiments received sympathy from some committee members, but not many.
“I don’t like the idea of regulating to keep competition from existing,” said John Bartolotta, president and co-owner of southeast Wisconsin-based Bartolotta Restaurants.
Nagy and the Wisconsin Agricultural Tourism Association claim licensing and more regulation could drive them out of business, something committee member John Macy advised his colleagues to weigh.
“The end result of this would be what? What happens to the wedding barn industry? Does it go away?” the Waukesha attorney asked.
As the “convoluted” license laws are currently written, there are only so many alcoholic beverage licenses to go around. Would a new license be bound by the old quota system?
Swearingen, who also owns a supper club in his home district, said he doubted that creating a “consumption license” would put Wisconsin wedding barns out of business.
Industry watchers say it depends. If it’s a simple license process that covers annual or seasonal operations and doesn’t cost an arm and a leg, then there probably is no peril. If it’s putting wedding barns, often side businesses for farmers and rural property owners with limited profits, through all kinds of expensive and time-consuming regulatory hoops then the licensure process could hinder these entrepreneurs.
As the “convoluted” license laws are currently written, there are only so many alcoholic beverage licenses to go around. Would a new license be bound by the old quota system? Johnson, the former Department of Revenue bureaucrat, didn’t think so, but the details remain to be seen.
“As the municipal attorney on the committee confirmed, this proposal will shut down many wedding barns in the state,” said Eric Bott, executive director of Americans for Prosperity-Wisconsin. “Let’s be clear: If you require a business to purchase a permit to remain operating and simultaneously support a quota system leaving zero permits available at any price, you are knowingly banning that business.”
State Sen. Dan Feyen (R-Fond du Lac), co-chair of the study committee, advised the panel to trash the latest bill draft and draw up a new proposal.
Critics assert the current draft’s language and the state’s definitions of public and nonpublic property are confusing and could restrict other private events from serving alcohol without a license.
That’s what worries committee member and craft brewery representative William Glass. He questioned whether the language of the proposal would adversely affect other small businesses the committee hadn’t yet considered.
“You are way overthinking this,” Swearingen told Glass.
“Well, we often underthink these things and that’s why we end up in situations like we are in now,” Glass answered.
Original story
Steve Nagy fled his native communist Hungary as a 12-year-old boy. He knows what oppression looks like. The wedding barn owner says it looks a lot like what a Wisconsin legislative committee is contemplating. #wiright #wipolitics Click To TweetMacIver News Service | Sept. 26, 2018
By M.D. Kittle
MADISON – Steve Nagy knows what oppression is.
The Budapest native was 12 years old when he and his family fled in the aftermath of the Hungarian Revolution of 1956 and joined some 200,000 refugees escaping their beloved homeland, reeling under the control of a puppet government of the Soviet Union.
Nagy asserts the pursuit of his happiness – the fruits of his hard work for the past 37 years – is in danger, threatened by a legislative study committee more interested in protectionism and cronyism than the free market.
For two generations, the Nagy family had operated food-related businesses in Hungary. All was lost in the communist takeover of the late 1940s and ‘50s when the government nationalized businesses.
“Meaning you were lucky to be an employee of a business you previously owned,” Nagy told MacIver News Service last week on the Vicki McKenna Show on NewsTalk 1310 WIBA.
The Nagys escaped to Austria and then were admitted into the United States. Nagy remembers seeing the Statue of Liberty for the first time as the ship carrying him to the promised land sailed into New York Harbor.
“We were excited. We heard the streets are paved with gold and everybody is rich here,” Nagy said. “Well, of course that wasn’t true, but what was true is the (Declaration of Independence) guaranteed life, liberty, and the pursuit of happiness. You could pursue your happiness.”
And this immigrant family did successfully pursue its idea of happiness, launching a chain of groceries and meat markets soon after their arrival.
But Nagy asserts the pursuit of his happiness – the fruits of his hard work for the past 37 years – is in danger, threatened by a legislative study committee more interested in protectionism and cronyism than the free market.
“Never in my 62 years as (a) resident of the US—since arriving as a refugee from Hungary at the age of 12—have I witnessed such an unethical display of business protectionism disguised as a legitimate process to improve the laws!” Nagy wrote in a letter earlier this month to Senate President Roger Roth (R-Appleton).
Nagy is owner and operator of Homestead Meadows, a rural Outagamie County agriculture-themed event venue, more commonly known as a wedding barn.
The niche hospitality business has grown since Nagy and his family launched Homestead Meadows in 1981, and the success of wedding barns certainly has drawn the attention of some hospitality competitors.
A special legislative study committee, ostensibly charged with reviewing laws and enforcement of Wisconsin’s controversial three-tiered system of alcohol production, distribution, and sales, is about to contemplate draft legislation that could put businesses like Nagy’s wedding barn at risk of extinction.
Many of the Tavern League’s assertions are not true, according to the Wisconsin Agricultural Tourism Association.
The committee, which has seemed to alienate or tick off a variety of producers and sellers or alcohol, is set to discuss a proposal dealing with the consumption of alcoholic beverages on “certain nonpublic property” at its meeting this morning, scheduled for 10 a.m. in Room 411 South of the Capitol.
The proposal’s list of prohibitions would include agriculture-themed event venues. That is, wedding barns and like businesses may no longer be able allow their patrons to provide alcoholic beverages to their guests, which would certainly cut into the wedding reception business in beer happy Wisconsin.
More galling to Nagy and the Wisconsin Agricultural Tourism Association is that the chairman of the committee, state Rep. Rob Swearingen (R-Rhinelander), is a restaurant owner and former president of the Tavern League of Wisconsin.
In the last session the league opposed bills to extend retail sales hours at wineries, and it insists that agriculture venues that sell alcohol are receiving an advantage over bars and restaurants.
“We are not against wedding barns but it is patently unfair for their businesses to have … advantages over the thousands of properly licensed Wisconsin businesses,” the Tavern League insists in a position statement.
The group asserts that wedding barns do not have to obtain municipal alcohol licenses, aren’t subject to local ordinances that other licensed premises are, and are not required to purchase beer, wine or liquor through a licensed wholesaler “thereby dramatically undercutting licensed businesses.”
Many of the Tavern League’s assertions are not true, according to the Wisconsin Agricultural Tourism Association.
“There is no such thing as an ‘unlicensed wedding barn,’” WATA wrote in a recent rebuttal to tavern owners. “There are many local municipal, county and state ordinances and laws that affect each business and require compliance with applicable ordinances, laws, zoning codes, fire inspections, commercial building codes, ADA accessibility accommodations, single-event permitting requirements, etc.”
It is true that wedding barns do not have to obtain municipal alcohol licenses. Class B and C liquor licenses are not required for private events. WATA says some operators have them, but many wedding barn owners don’t want to be in the tavern business. They provide unique event space, and leave alcohol service to the event planners.
“These venues do NOT purchase alcohol, since they chose not to be in the business of selling and serving alcohol beverages,” the association notes. “They wish to be in the business of operating grand outdoor-themed event venues, not taverns or traditional banquet halls.”
Swearingen said the “narrow scope” of the study committee does not address the concerns of the “Barn Association” as it relates to alcohol production, distribution, and sales. The committee has solely focused on the enforcement division of the state Department of Revenue, the lawmaker said.
“Obviously, addressing venues that are dispensing alcohol without being properly licensed is a large part of the scope,” Swearingen said in an email to MacIver News Service.
Nagy claims Swearingen’s singular mission is to “limit competition.” He said Swearingen has an inherent conflict of interest as chairman of the study committee.
“It is unfortunate that anyone would interpret that the goal of the committee is to put entrepreneurs out of business,” he added. “We are simply trying to ensure that venues dispensing alcohol are properly licensed to do so.”
Nagy claims Swearingen’s singular mission is to “limit competition.” He said Swearingen has an inherent conflict of interest as chairman of the study committee.
The lawmaker responded that he doesn’t know what all the fuss is about. He said he was asked by the co-chairs of the Joint Legislative Council to chair the study committee.
“I did not seek out the position but was selected,” Swearingen said, “I am assuming, for my decades of experience in the hospitality industry.”
Critics of a last-minute Tavern League-led amendment to the winery bill, which would have extended closing times from 9 p.m. to midnight, said the changes could kill tailgating by requiring private property owners near sport venues to obtain a liquor license. Such licenses can cost thousands of dollars and there are only so many to go around.
The legislation is tied to the broader issue of enforcement and what many in craft industries see as the urgent need for regulatory reform. Late last session, the Republican-controlled Senate unsuccessfully tried to move through a measure that would have created another layer of bureaucracy, led by an ‘alcohol czar,’ to tighten up enforcement. The proposal would have transferred agents and the alcohol enforcement mission from the state Department of Revenue to a new Office of Alcohol Beverages Enforcement.
With broad authority to enforce Wisconsin’s complicated and protectionist three-tier alcohol production, distribution, and sales laws, the new bureau’s agents would have had the power to make warrantless arrests.
The draft bill sent around earlier this month is new, exempting a number of entities – just not wedding barns. The bill specifically deals with licensing.
Such requirements would be detrimental to struggling Wisconsin farmers trying help their revenue flow by expanding into agri-tourism, industry officials assert.
Nagy said tacking on onerous requirements is “spanking the small businessperson” even as Republican lawmakers push a $100 million bailout of multinational Kimberly-Clark Corp.
“Government should to operate like this. It should not be picking winners and losers,” Nagy said.