Senate Majority Leader Scott Fitzgerald (R-Juneau) introduced a bill (SB 801) that would create an Office of Alcohol Beverages Enforcement attached to the Department of Revenue. The Office would oversee alcohol regulation, enforcement, and permitting. The bill also creates a resort manufacturer permit issued by the Office that authorizes production and sale of alcohol outside of the current three-tier distribution system for alcohol. The permit was designed specifically so that the Kohler resort in Sheboygan County could sell liquor that it has distilled under the resort’s name. Currently, under the three-tier system, Kohler can not sell Kohler branded liquor at Kohler properties. This exemption to the three-tier system in the bill was narrowly crafted to only include large resorts with at least one spa, at least five restaurants, and championship golf courses of at least 36 holes (i.e. Kohler).
The Senate Committee on Economic Development, Commerce and Local Government held a public hearing on the bill on Feb. 15. Both provisions of the bill were met with pushback from many segments of the alcohol industry including big brewers, small brewers, retailers, and business groups. The small brewers packed the hearing room registering and testifying against the bill. Concern was raised about the creation of a new entity to enforce alcohol laws and how that would interact with various segments of the alcohol industry, but that wasn’t the only problem opponents had with the bill. Many were critical of the fact that a carve out for Kohler was being expedited while many of the small brewers have similar issues in getting their product to market.
The committee was scheduled to vote via paper ballot today (Feb. 16), but that vote has now been cancelled as it appears the votes are not there to pass the bill out of committee.