4. Blending or mixing wine or distilled spirits. Current law is unclear as to
whether a winery operating under a winery permit may mix or blend wine with other
intoxicating liquor to produce fortified wine and whether a winery may receive
shipments of bulk wine or other intoxicating liquor directly from out-of-state
producers holding an out-of-state shipper's permit.
This substitute amendment clarifies that a winery operating under a winery
permit may, without obtaining a rectifier's permit, possess intoxicating liquor and
mix or blend intoxicating liquor to produce wine sold to wholesalers. The substitute
amendment also clarifies the definition of "wine" by specifying that wine contains not
more than 21 percent of alcohol by volume.
The substitute amendment specifically authorizes wholesalers to sell
intoxicating liquor to wineries, manufacturers, and rectifiers for production
purposes. The substitute amendment also specifies that an out-of-state shipper's
permittee may sell or ship intoxicating liquor into this state directly to a winery.
5. Face-to-face retail sales. The substitute amendment specifies that an
intoxicating liquor or fermented malt beverages retail license or permit, with limited
exceptions, authorizes only face-to-face sales to consumers at the premises
described in the retail license or permit.
6. Common ownership interests. The substitute amendment specifies that
certain restrictions on common ownership interests that apply under current law to
manufacturers, rectifiers, and wholesalers also apply to wineries and out-of-state
shipper permittees. The substitute amendment further provides that rectifiers,
wineries, and out-of-state shipper permittees may not hold any direct or indirect
interest in any wholesale permit or establishment and that, except for a retail license
issued to a winery, no retail licensee may hold any direct or indirect interest in any
manufacturer, rectifier, winery, or out-of-state shipper permittee.
Under current law, an exception to the common ownership restrictions allows
a winery to hold one retail license, which may be a "Class A" license or a "Class B"
license. The substitute amendment clarifies this exception, including specifying that
the retail licensed premises may be on the winery premises or on real estate owned
or leased by the winery and that the winery may distribute its own wine to its own
retail premises without going through a wholesaler.
7. DOR industry reports. The substitute amendment requires DOR to publish
monthly reports containing specified information related to the intoxicating liquor
industry.

8. Wine collectors. The substitute amendment specifically authorizes, by
creating a new license or permit exception, a wine collector to sell to any other wine
collector manufacturer-sealed bottles or containers of wine that the seller has held
for at least eight years, but limits this exception to one sale in a 12-month period.
The substitute amendment also authorizes a wine collector to donate
manufacturer-sealed bottles or containers of wine to any charitable organization
and allows the charitable organization to use the wine in any event held by the
charitable organization or other fund-raising effort of the charitable organization.
9. Effective date. The general effective date of the substitute amendment is
October 1, 2008. Notwithstanding any other provision of the substitute amendment,
a winery holding a winery permit issued prior to the substitute amendment's
effective date may continue to sell its wine at wholesale, in the manner authorized
under current law, until June 30, 2009.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB795-ASA1, s. 1 1Section 1. 20.566 (1) (ha) of the statutes is amended to read:
AB795-ASA1,6,112 20.566 (1) (ha) Administration of liquor tax and alcohol beverages enforcement.
3The amounts in the schedule for computer, audit, and enforcement costs incurred in
4administering the tax under s. 139.03 (2m) and for costs incurred in enforcing the
53-tier system for alcohol beverages production, distribution, and sale under ch. 125.
6All moneys received from the administration fee under s. 139.06 (1) (a) and any
7permit fee under s. 125.535 (2)
shall be credited to this appropriation.
8Notwithstanding s. 20.001 (3) (a), at the end of each fiscal year, the unencumbered
9balance of this appropriation account, minus an amount equal to 10% of the sum of
10the amounts expended and the amounts encumbered from the account during the
11fiscal year, shall lapse to the general fund.
AB795-ASA1, s. 2 12Section 2. 36.11 (40) of the statutes is amended to read:
AB795-ASA1,6,1513 36.11 (40) Center for cooperatives. The board shall maintain a center for
14cooperatives at the University of Wisconsin-Madison. The center shall comply with
15the requirements specified in s. 125.545 (5) (a).
AB795-ASA1, s. 3
1Section 3. 125.01 of the statutes is amended to read:
AB795-ASA1,7,14 2125.01 Legislative intent. This chapter shall be construed as an enactment
3of the legislature's support for the 3-tier system for alcohol beverages production,
4distribution, and sale that, through uniform statewide regulation, provides this
5state regulatory authority over the production, storage, distribution, transportation,
6sale, and consumption of alcohol beverages by and to its citizens, for the benefit of
7the public health and welfare and this state's economic stability. Without the 3-tier
8system, the effective statewide regulation and collection of state taxes on alcohol
9beverages sales would be seriously jeopardized. It is further the intent of the
10legislature that without a specific statutory exception, all sales of alcohol beverages
11shall occur through the 3-tier system, from manufacturers to licensed wholesalers
12to retailers to consumers. Face-to-face retail sales at licensed premises directly
13advance the state's interest in preventing alcohol sales to underage or intoxicated
14persons and the state's interest in efficient and effective collection of tax.
AB795-ASA1, s. 4 15Section 4. 125.02 (22) of the statutes is amended to read:
AB795-ASA1,7,2016 125.02 (22) "Wine" means products obtained from the normal alcohol
17fermentation of the juice or must of sound, ripe grapes, other fruits or other
18agricultural products, imitation wine, compounds sold as wine, vermouth, cider,
19perry, mead and sake, if such products contain 0.5% or more not less than 0.5 percent
20nor more than 21 percent
of alcohol by volume.
AB795-ASA1, s. 5 21Section 5. 125.02 (23) of the statutes is created to read:
AB795-ASA1,7,2422 125.02 (23) "Wine collector" means an individual who meets the standards
23established by the department by rule and who is registered with the department as
24a collector of wine.
AB795-ASA1, s. 6 25Section 6. 125.03 (1) of the statutes is renumbered 125.03 (1) (a).
AB795-ASA1, s. 7
1Section 7. 125.03 (1) (b) of the statutes is created to read:
AB795-ASA1,8,52 125.03 (1) (b) The department shall promulgate rules providing for registration
3of wine collectors and establishing standards of eligibility for registration as a wine
4collector. The rules shall also specify the form and manner of notice required under
5s. 125.06 (11m) (a).
AB795-ASA1, s. 8 6Section 8. 125.03 (3) of the statutes is amended to read:
AB795-ASA1,8,87 125.03 (3) Violations. No person may violate a rule promulgated under sub.
8(1) (a) or (2).
AB795-ASA1, s. 9 9Section 9. 125.04 (3) (a) 4m. of the statutes is created to read:
AB795-ASA1,8,1110 125.04 (3) (a) 4m. If the applicant is a cooperative organized under ch. 185, the
11identity of the cooperative members, board of directors, and agent.
AB795-ASA1, s. 10 12Section 10. 125.06 (11m) of the statutes is created to read:
AB795-ASA1,8,1713 125.06 (11m) Wine collectors. (a) The sale by a wine collector to any other
14wine collector of manufacturer-sealed bottles or containers of wine that the selling
15wine collector has held for at least 8 years if the selling wine collector has provided
16prior notice of the sale to the department. No more than one sale in any 12-month
17period may be conducted by a wine collector under this paragraph.
AB795-ASA1,8,2218 (b) The donation by a wine collector of manufacturer-sealed bottles or
19containers of wine to any charitable organization for use by the charitable
20organization in any event held by the charitable organization or other fund-raising
21effort of the charitable organization, and no license or permit under this chapter is
22required of the charitable organization for such use of the donated wine.
AB795-ASA1, s. 11 23Section 11. 125.12 (5) of the statutes is amended to read:
AB795-ASA1,9,624 125.12 (5) Revocations or suspensions of, or refusals to renew, permits by
25the department.
The department may, after notice and an opportunity for hearing,

1revoke, suspend or refuse to renew any retail permit issued by it for the causes
2provided in sub. (4) and any other permit issued by it under this chapter for any
3violation of this chapter or ch. 139, except that, for a violation of sub. (4) (ag) 6. with
4respect to a license issued under s. 125.51 (4) (v) or a violation of s. 125.535 or
5139.035
, the department shall revoke the license or permit. A revocation, suspension
6or refusal to renew is a contested case under ch. 227.
AB795-ASA1, s. 12 7Section 12. 125.272 of the statutes is created to read:
AB795-ASA1,9,11 8125.272 Face-to-face retail sales. Except as provided in s. 125.26 (2m) and
9(2s) and except with respect to caterers, a retail license issued under s. 125.25 or
10125.26, and a retail permit issued under s. 125.27, authorizes only face-to-face sales
11to consumers at the premises described in the retail license or permit.
AB795-ASA1, s. 13 12Section 13. 125.51 (6) of the statutes is created to read:
AB795-ASA1,9,1613 125.51 (6) Face-to-face retail sales. Except as provided in sub. (3) (bm) and
14(bs) and except with respect to caterers, a retail license or permit issued under this
15section authorizes only face-to-face sales to consumers at the premises described in
16the retail license or permit.
AB795-ASA1, s. 14 17Section 14. 125.52 (1) of the statutes is amended to read:
AB795-ASA1,9,2518 125.52 (1) Authorized activities. The department shall issue manufacturers'
19and rectifiers' permits which authorize the manufacture or rectification,
20respectively, of intoxicating liquor on the premises covered by the permit. A person
21holding a manufacturer's or rectifier's permit may manufacture, and bottle or
22wholesale
wine, pursuant to the terms of the permit, without procuring a winery
23permit. A manufacturer's or rectifier's permit entitles the permittee to sell
24intoxicating liquor to wholesalers holding a permit under s. 125.54, to wineries
25holding a permit under s. 125.53, and to other manufacturers and rectifiers holding

1a permit under this section,
from the premises described in the permit. Holders of
2rectifiers' permits may sell intoxicating liquor rectified by the permittee to retailers
3without any other permit.
No sales may be made for consumption on the premises
4of the permittee. Possession of a permit under this section does not authorize the
5permittee to sell tax-free intoxicating liquor and wines brought into this state under
6s. 139.03 (5).
AB795-ASA1, s. 15 7Section 15. 125.52 (6) of the statutes is repealed.
AB795-ASA1, s. 16 8Section 16. 125.52 (8) of the statutes is repealed.
AB795-ASA1, s. 17 9Section 17. 125.53 (1) of the statutes is amended to read:
AB795-ASA1,11,210 125.53 (1) The department shall issue only to a manufacturing winery in this
11state that holds a valid certificate issued under s. 73.03 (50) a winery permit
12authorizing the manufacture and bottling of wine on the premises covered by the
13permit for sale at wholesale to other licensees or permittees to wholesalers holding
14a permit under s. 125.54. A winery permit also authorizes the permittee to, on the
15winery premises and without obtaining a rectifier's permit, possess intoxicating
16liquor and mix or blend intoxicating liquor to produce wine sold to wholesalers
17holding a permit under s. 125.54
. A permittee winery holding a permit under this
18section may offer on the premises taste samples of wine manufactured on the
19premises to persons who have attained the legal drinking age. A permittee under
20this section may also have either a one "Class A" license or one "Class B" license,
21but not both. The "Class A" license or "Class B" license may either be issued for the
22winery premises or for real estate owned or leased by the winery.
If a "Class A" or
23"Class B" liquor license has also been issued to the winery, the winery may provide
24wine manufactured, mixed, or blended on the winery premises directly to the "Class

1A" or "Class B" premises and
may offer the taste samples on the "Class A" or "Class
2B" premises.
AB795-ASA1, s. 18 3Section 18. 125.53 (3) of the statutes is repealed.
AB795-ASA1, s. 19 4Section 19. 125.535 of the statutes is created to read:
AB795-ASA1,11,9 5125.535 Direct wine shippers' permits. (1) Authorized activities. The
6department shall issue direct wine shippers' permits authorizing the permittee to
7ship wine directly to an individual in this state who is of the legal drinking age, who
8acknowledges receipt of the wine shipped, and who is not intoxicated at the time of
9delivery.
AB795-ASA1,11,12 10(2) Annual permit fee. The department may, by rule, establish an annual fee,
11not to exceed $100, for each permit issued under this section. All fees collected under
12this subsection shall be credited to the appropriation account under s. 20.566 (1) (ha).
AB795-ASA1,11,15 13(3) Persons eligible. (a) A direct wine shipper's permit may be issued under
14this section to any person that manufactures and bottles wine on premises covered
15by any of the following:
AB795-ASA1,11,1616 1. A manufacturer's or rectifier's permit under s. 125.52.
AB795-ASA1,11,1717 2. A winery permit under s. 125.53.
AB795-ASA1,11,1918 3. A winery license, permit, or other authorization issued to the winery by any
19state from which the winery will ship wine into this state.
AB795-ASA1,11,20204. A federal basic permit for a winery under 27 USC 203 and 204.
AB795-ASA1,11,2221 (b) A winery located outside of this state is eligible for a direct wine shipper's
22permit under par. (a) 3. or 4. if all of the following apply:
AB795-ASA1,11,2423 1. The winery holds a valid business tax registration certificate issued under
24s. 73.03 (50).
AB795-ASA1,12,4
12. The winery submits to the department, with any initial application or
2renewal for a certificate under s. 73.03 (50) or a permit under par. (a) 3. or 4., a copy
3of any current license, permit, or authorization issued to the winery by the state from
4which the winery will ship wine into this state or the winery's federal basic permit.
AB795-ASA1,12,135 (c) Notwithstanding s. 125.04 (5) (a), natural persons obtaining direct wine
6shippers' permits are not required to be residents of this state. Notwithstanding s.
7125.04 (5) (a) 5., a person is not required to complete a responsible beverage server
8training course to be eligible for a permit under this section. Corporations and
9limited liability companies obtaining direct wine shippers' permits are subject to s.
10125.04 (6) and any other person, including any natural person or cooperative,
11obtaining a direct wine shipper's permit shall appoint an agent, and be subject to all
12provisions of s. 125.04 (6), in the same manner applicable to corporations and limited
13liability companies.
AB795-ASA1,12,16 14(4) Labels. Containers of wine shipped to an individual in this state under this
15section shall be clearly labeled to indicate that the package may not be delivered to
16an underage person or to an intoxicated person.
AB795-ASA1,12,18 17(5) Restrictions. No individual may resell, or use for a commercial purpose,
18wine received by the individual that is shipped under authority of this section.
AB795-ASA1,12,23 19(6) Annual limit. No individual in this state may receive more than 108 liters
20of wine annually shipped under authority of this section. Each individual shall be
21responsible for compliance with this annual limit. An individual who violates this
22annual limit is subject to s. 125.11 (1). This subsection does not apply to purchases
23made under a permit issued under s. 125.61.
AB795-ASA1, s. 20 24Section 20. 125.54 (1) of the statutes is amended to read:
AB795-ASA1,13,10
1125.54 (1) Authorized activities. The department shall issue wholesalers'
2permits authorizing the permittee to sell, from the premises described in the permit,
3intoxicating liquor at wholesale from the premises described in the permit. Except
4as provided under s. 125.69 (1) (b) 3., the
to retailers and wholesalers, as well as to
5manufacturers, rectifiers, and wineries for production purposes. The
permittee may
6not sell intoxicating liquor for consumption on the premises. If a wholesale permit
7is issued to a brewery that holds a "Class B" license, the permit shall authorize the
8wholesale sale of wine only.
Possession of a permit under this section does not
9authorize the permittee to sell tax-free intoxicating liquor and wine brought into
10this state under s. 139.03 (5).
AB795-ASA1, s. 21 11Section 21. 125.54 (7) (e) of the statutes is created to read:
AB795-ASA1,13,1312 125.54 (7) (e) This subsection does not apply to a cooperative wholesaler under
13s. 125.545.
AB795-ASA1, s. 22 14Section 22. 125.54 (8) of the statutes is created to read:
AB795-ASA1,13,1915 125.54 (8) Duty to work in good faith. Each wholesaler has an obligation to
16negotiate in good faith with any manufacturer, rectifier, or winery that seeks to sell
17its products in this state through the wholesaler. To this end, all wholesalers shall
18work diligently to ensure that distribution channels are available for the sale of
19intoxicating liquor products through wholesalers to retailers in this state.
AB795-ASA1, s. 23 20Section 23. 125.545 of the statutes is created to read:
AB795-ASA1,13,22 21125.545 Small winery cooperative wholesalers. (1) Definitions. In this
22section:
AB795-ASA1,13,2523 (a) "Member" means a small winery that meets the requirements established
24under this section for membership in a cooperative wholesaler and that has been
25qualified and accepted for membership in a cooperative wholesaler.
AB795-ASA1,14,2
1(b) "Out-of-state winery" means a winery that is located in a state other than
2this state and that holds a valid direct shipper's permit issued under s. 125.535.
AB795-ASA1,14,43 (c) "Retailer" means any person holding a "Class A", "Class B", or "Class C"
4license or "Class B" permit issued under s. 125.51.
AB795-ASA1,14,65 (d) "Small winery" means any winery that produces and bottles less than
625,000 gallons of wine in a calendar year.
AB795-ASA1,14,87 (e) "Small winery cooperative wholesaler" or "cooperative wholesaler" means
8an entity established under this section.
AB795-ASA1,14,109 (f) "Wisconsin winery" means a winery operating under a permit issued under
10s. 125.53.
AB795-ASA1,14,17 11(2) Creation and organization. (a) 1. A cooperative wholesaler may only be
12created as provided under s. 185.043 (2) and this section. Each cooperative
13wholesaler operating under authority of this section shall be organized under ch. 185
14but shall be subject to the limitations on such cooperatives imposed by this section.
15Subject to subd. 3., only small wineries may be members of a cooperative wholesaler.
16The principal purpose of a cooperative wholesaler shall be to sell and distribute wine
17manufactured, blended, or mixed, and also bottled, by its members.
AB795-ASA1,14,2018 2. Notwithstanding s. 185.08 (1), a cooperative wholesaler shall include in its
19articles of incorporation under ch. 185 a single location for its agent and principal
20office, which location shall be in this state.
AB795-ASA1,14,2221 3. A small winery may become a member of a cooperative wholesaler only if all
22of the following apply:
AB795-ASA1,14,2323 a. The small winery holds a direct shipper's permit under s. 125.535.
AB795-ASA1,14,2524 b. The small winery is certified by the department under sub. (6) (a) as a small
25winery.
AB795-ASA1,15,6
1(b) In addition to the requirements specified in s. 185.31 for the board of
2directors of a cooperative wholesaler, a director representing a member that is a
3Wisconsin winery shall be either an owner or an employee of that Wisconsin winery.
4If any out-of-state winery is a member of the cooperative wholesaler, at least one
5director shall be either an owner or an employee of an out-of-state winery that is a
6member of the cooperative wholesaler.
AB795-ASA1,15,117 (c) Notwithstanding any provision of ch. 185, a cooperative wholesaler may not
8employ any owner or employee of a member. However, an individual that is an owner
9or an employee of a member may act as a volunteer to assist that cooperative
10wholesaler in the sale and distribution of wine to retailers and other wholesalers in
11the manner authorized under this section.
AB795-ASA1,15,19 12(3) Authorization and activities. (a) 1. Within 7 days after filing its articles
13of incorporation under ch. 185, a cooperative wholesaler shall apply to the
14department for a wholesaler's permit under s. 125.54. The provisions of s. 125.04 (5)
15(c) and (6) shall apply to a cooperative wholesaler as if the cooperative wholesaler
16were a corporation or a limited liability company and, for each of these provisions,
17the department shall determine whether the cooperative wholesaler is most similar
18to a corporation or a limited liability company in the context of that provision and
19apply that provision to the cooperative wholesaler accordingly.
AB795-ASA1,15,2520 2. Notwithstanding s. 125.54 (6), the department may issue not more than one
21wholesaler's permit to any cooperative wholesaler. The department may not issue
22more than a total of 6 wholesalers' permits to cooperative wholesalers in this state.
23The department may not issue any new wholesaler's permit to a cooperative
24wholesaler after December 31, 2008, but may renew wholesalers' permits that were
25initially issued to cooperative wholesalers prior to that date.
AB795-ASA1,16,2
13. No cooperative wholesaler may operate in this state without a wholesaler's
2permit.
AB795-ASA1,16,73 (b) 1. Notwithstanding s. 125.54 (1), and except as provided in subd. 3., a
4cooperative wholesaler issued a wholesaler's permit under par. (a) is authorized to
5sell and distribute only wine. Except as provided in subd. 3., a cooperative
6wholesaler may not sell or distribute any alcohol beverages, or any other product,
7except wine.
AB795-ASA1,16,148 2. A cooperative wholesaler shall purchase on consignment wine from its
9members to be resold to retailers and other wholesalers. Notwithstanding s. 125.69
10(5), a cooperative wholesaler may not purchase wine from any person other than a
11member. A cooperative wholesaler may not resell or distribute wine unless it has
12been purchased on consignment from a member. Notwithstanding s. 125.54 (1), a
13cooperative wholesaler may not sell or distribute wine except to a retailer or to a
14wholesaler holding a permit under s. 125.54.
AB795-ASA1,16,2015 3. A cooperative wholesaler may purchase ancillary wine industry trade goods
16such as bottles, corks, and other supplies used by wineries in the bottling and sale
17of wine if such trade goods do not include any alcohol beverages. Any wine industry
18trade goods purchased by a cooperative wholesaler under this subdivision may be
19offered for resale to the cooperative wholesaler's members or to any winery that was
20formerly a member of the cooperative wholesaler.
AB795-ASA1,16,2421 4. A cooperative wholesaler shall work with all of its members on evenhanded
22terms. Any preferential treatment by a cooperative wholesaler for the benefit of a
23member that is a Wisconsin winery, and any discrimination against a member that
24is an out-of-state winery, is prohibited.
AB795-ASA1,17,5
1(c) Neither a cooperative wholesaler nor its members are subject to any
2restriction on dealings under s. 125.69 (1) between wholesalers and wineries. Except
3as provided in s. 125.54 (7) (e) and as otherwise provided in this section, all provisions
4of this chapter and ch. 139 that apply to a wholesaler issued a permit under s. 125.54
5also apply to a cooperative wholesaler issued a permit under s. 125.54.
AB795-ASA1,17,10 6(4) Exclusive distribution. A member of a cooperative wholesaler may make
7its wine available for purchase by a retailer or another wholesaler only through the
8cooperative wholesaler of which it is a member. A member of a cooperative
9wholesaler may not sell its wine directly to any other wholesaler or directly to a
10retailer.
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