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It was a nasty shock when Craig Peterson recently opened his mail and found that a new law required him to buy an annual beer wholesaler's state permit for $2,600 - replacing the requirement to buy a municipal license for $100.

Peterson operates Buffalo Water Beer Co., a Milwaukee-based firm that owns the Bison Blonde beer brand, which is made at the Milwaukee Brewing Co. brewery in Walker's Point. Buffalo Water and other small "recipe brewers," which own brands but not breweries, found themselves facing the prospect of having to sell a lot of beer just to satisfy the new state requirement.

"I'd have to sell 10 pallets, with 50 cases each, just to pay for the license," said Peterson, who also operates Zigman Joseph Stephenson Inc., a Milwaukee public relations and lobbying firm.

However, a new emergency rule that takes effect Friday will eliminate that requirement for recipe brewers, said Stephanie Marquis, Department of Revenue spokeswoman. Other Wisconsin recipe brewers affected by the rule include Milwaukee-based Horny Goat Brewing Co. and Furthermore Brewing Co., based in Spring Green.

The new rule, which Gov. Scott Walker has signed, allows recipe brewers to self-distribute their beer without being defined as beer wholesalers, Marquis said. That exempts them from paying for the wholesaler's permit, she said.

Without the emergency rule, the new fees for recipe brewers would have taken effect in February, Peterson said.

Department officials started working on the emergency rule after Walker last year signed the state budget bill, which included new regulations for Wisconsin craft brewers and beer wholesalers.

The new regulations prohibit brewers from buying wholesale distributorships, while allowing brewers that produce up to 300,000 barrels annually to do their own wholesale distribution - which requires brewers to pay for the state wholesaling permit.

Some Wisconsin craft brewers do their own wholesale distribution. Others sell their beer primarily through wholesalers, while also doing limited self-distribution by selling beer at festivals or filling emergency orders from taverns.

The legislation's supporters, including MillerCoors and the state's beer wholesalers, said it was designed to stop Anheuser-Busch from buying wholesale distributors in Wisconsin. That concern arose after Anheuser-Busch in 2010 won a court challenge to an Illinois law that barred out-of-state brewers from owning beer wholesalers while exempting small, Illinois-based craft brewers from that ban.

Wisconsin craft brewers say those fears are exaggerated, and that the legislation will hamper their growth prospects.

At least with the emergency rule, small recipe brewers like Buffalo Water will avoid a major expense that could have threatened their ability to remain in business, said Peterson.

"None of us had budgeted $2,600 to pay for a licensing fee," Peterson said. "The whole thing was just ridiculous."