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Pending legislation that would prohibit brewers from buying wholesale beer distributors in Wisconsin is raising concerns among the state's smaller craft brewers.

The legislation is designed to prevent Anheuser-Busch InBev, the world's biggest brewer, from buying wholesale distributors.

Most of the nation's beer is sold by brewers to independent wholesalers, who then earn a profit by reselling the beer to supermarkets, taverns and other retailers. That so-called three-tier system has operated since Prohibition's repeal, and was designed to prevent brewers from operating monopolies making, distributing and selling beer.

But last year Anheuser-Busch 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. Anheuser-Busch successfully argued that the law was unfair because it only applied to out-of-state brewers.

To avoid a similar court challenge in Wisconsin, the Wisconsin Beer Distributors Association and MillerCoors LLC, Anheuser-Busch's chief rival, are lobbying for a bill that would change a state law that regulates how brewers do wholesale distribution, said Tim Roby, association spokesman.

Under current state law, a brewer that wants to sell beer directly to retailers without using wholesale distributors must obtain a wholesale license. The proposed legislation would create just one permit for brewing and selling beer, which would streamline the licensing process, Roby said.

The proposal also would prohibit brewers from buying wholesale distributorships, while allowing brewers to do their own wholesale distribution of up to 300,000 barrels annually, said Roby and Pete Marino, a spokesman for Chicago-based MillerCoors. The current law allows brewers to self-distribute up to 50,000 barrels annually, Marino said.

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 and other retailers. The state's largest independent craft brewer, New Glarus Brewing Co., sold about 92,000 barrels in 2010.

MillerCoors supports the proposal because it shares the concerns that wholesale distributors have about the possibility of Anheuser-Busch aggressively buying beer wholesalers throughout the country, Marino said. MillerCoors, created by the 2008 merger of Miller Brewing Co. and Coors Brewing Co., owns one wholesaler, and has no plans of buying additional distributorships, he said.

But craft brewers are concerned that the proposed legislation could include provisions that impose new restrictions on how they sell beer at the wholesale level, said Carl Nolen, president of Middleton-based Capital Brewery Co.

Part of the problem is that no legislation has yet been formally introduced, said Nolen, past-president of the Wisconsin Brewers Guild, a trade group for the state's craft brewers.

As a result, the bill has only been made available, in draft form, to a limited number of legislators and lobbyists. It doesn't yet have co-sponsors in the Assembly and Senate, and a copy of it cannot be found at the Legislature's Web site.

By avoiding that normal process of introducing legislation, the bill is being kept under wraps - bypassing a public hearing and extensive debate, Nolen said. He said the bill's supporters plan to attach it to the state budget bill now pending before the Legislature's Joint Finance Committee.

Roby said the bill will likely come before the Joint Finance Committee some time within the next few days. He said the legislation is being introduced that way to get it quickly passed before Anheuser-Busch can proceed with possible plans to buy beer wholesalers in Wisconsin. An Anheuser-Busch spokesman couldn't be reached on whether the company plans to buy any Wisconsin wholesalers.

The beer wholesalers association and other groups supporting the legislation have consulted with craft brewers about the proposal, Roby said.

Nolen, however, said the bill has been created in a "cloaked manner."