Chapter 125

125.535 Note NOTE: The correct cross-references are shown in brackets. Corrective legislation is pending.

125.535(3)(d)2. 2. The permittee shall provide notice to the division 30 calendar days before termination of the authority of an agent under subd. 1. and shall provide proof to the satisfaction of the division of the appointment of a new agent no less than 5 calendar days before the termination of an existing agent appointment. In the event an agent terminates an agency appointment, the permittee shall notify the division of that termination within 5 calendar days and shall include proof to the satisfaction of the division of the appointment of a new agent.

125.535(3)(d)3. 3. If a permittee fails to maintain an agent in this state after a permit is issued under this section, the permittee is considered to have appointed the department of financial institutions as the permittee’s agent, and the permittee may be proceeded against in courts of this state by service of process upon the department of financial institutions.

125.535(3)(e) (e) The application for a permit under this section shall include a provision that the permittee agrees to do all of the following:

125.535(3)(e)1. 1. File reports, provide records, and allow inspections and examinations to the extent provided in s. 125.025 and ch. 139.

125.535(3)(e)2. 2. Pay the expenses reasonably attributable to inspections and examinations made by the division at any premises of the permittee located outside this state.

125.535(3)(e)3. 3. Accept service of process and consent to jurisdiction in any proceeding in this state to enforce the provisions of this chapter or ch. 139.

125.535(4) (4) Labels. Containers of wine shipped to an individual in this state under this section shall be clearly labeled to indicate that the package may not be delivered to an underage person or to an intoxicated person.

125.535(5) (5) Restrictions. No individual may resell, or use for a commercial purpose, wine received by the individual that is shipped under authority of this section.

125.535(6) (6) Annual limit. No individual in this state may receive more than 108 liters of wine annually shipped under authority of this section. Each individual shall be responsible for compliance with this annual limit. An individual who violates this annual limit is subject to s. 125.11 (1). This subsection does not apply to purchases made under a permit issued under s. 125.61.

125.535(7) (7) Shipments through fulfillment house; common carriers.

125.535(7)(a) (a) A permittee under this section may arrange with a fulfillment house to ship wine on the permittee’s behalf only if the fulfillment house holds a permit under s. 125.23.

125.535(7)(b) (b) All containers of wine shipped directly to an individual in this state shall be shipped using a common carrier holding a permit issued under s. 125.22.

125.535 History History: 2007 a. 85; 2023 a. 73.

125.54 125.54 Wholesalers’ permits.

125.54(1) (1) Authorized activities. The division shall issue wholesalers’ permits authorizing the permittee to sell, from the premises described in the permit, intoxicating liquor at wholesale to retailers and wholesalers, as well as to manufacturers, rectifiers, and wineries for production purposes. The permittee may not sell intoxicating liquor for consumption on the premises. Possession of a permit under this section does not authorize the permittee to sell tax-free intoxicating liquor and wine brought into this state under s. 139.03 (5).

125.54(2) (2) Persons eligible. Except as provided under s. 125.69, a wholesaler’s permit may be issued to any person who holds a valid certificate issued under s. 73.03 (50) and who is qualified under s. 125.04 (5), except a foreign corporation, a foreign limited liability company or a person acting as an agent for or in the employ of another. Notwithstanding s. 125.04 (5) (a) 5., a person is not required to complete a responsible beverage server training course to be eligible for a permit under this section.

125.54(3) (3) Taste samples on retail premises. Wholesalers holding a permit issued under this section, employees of such wholesalers, and individuals representing such wholesalers may not assist or participate in providing taste samples under s. 125.51 (2) (am) or 125.69 (9).

125.54(5) (5) Sales area. No wholesaler may sell any intoxicating liquor before filing with the division a written statement that the permittee is a distributor of a particular brand in this state, or an area of this state, and that the sales of that brand by the permittee and anyone purchasing from the permittee will be limited to the area specified. The permittee shall notify the division of any change in the area within 7 days of the effective date of the change.

125.54(6) (6) Multiple permits. Multiple wholesalers’ permits may be issued to any one person. In each application for a wholesaler’s permit, the applicant shall state whether application has been made for any other wholesaler’s permit and shall identify any other wholesaler’s permit held by the applicant.

125.54(7) (7) Bona fide wholesalers.

125.54(7)(a) (a)

125.54(7)(a)1. 1. The premises described in a permit issued under this section shall be capable of warehousing intoxicating liquor. Any intoxicating liquor sold by the permittee shall be physically unloaded at the premises described in the permit, or at any warehouse premises for which the permittee under this section also holds a permit issued under s. 125.19, prior to being delivered to a retail licensee or permittee or to another wholesaler.

125.54(7)(a)2. 2. A permittee under this section shall annually sell and deliver intoxicating liquor to at least 10 retail licensees or permittees that do not have an interest in each other or in the permittee under this section. The division shall not issue a permit under this section unless the applicant represents to the division an intention to satisfy this requirement, and shall not renew a permit issued under this section unless the permittee demonstrates that this requirement has been satisfied.

125.54(7)(b) (b) No intoxicating liquor retail licensee or permittee may receive a benefit from a violation under par. (a) with knowledge of the circumstances giving rise to the violation.

125.54(7)(c) (c)

125.54(7)(c)1. 1. A wholesaler who violates this subsection shall be fined not more than $10,000. In addition, a court shall order the wholesaler to forfeit an amount equal to any profit gained by the wholesaler or by a retail licensee or permittee that violates par. (b), or by both, resulting from the violation, and the court shall further order that the wholesaler’s permit be revoked.

125.54(7)(c)2. 2. A court shall order a retail licensee or permittee who violates this subsection to forfeit an amount equal to any profit gained by the retail licensee or permittee resulting from the violation, and the court shall further order that the retail license or permit be revoked.

125.54(7)(c)3. 3. This paragraph shall not affect the authority of any municipality or the division to revoke, suspend, or refuse to renew or issue a license or permit under s. 125.12.

125.54(7)(d) (d) The division shall promulgate rules to administer and enforce the requirements under this subsection. The rules shall ensure coordination between the division’s issuance and renewal of permits under this section and its enforcement of the requirements of this subsection, and shall require that all applications for issuance or renewal of permits under this section be processed by division personnel generally familiar with activities of intoxicating liquor wholesalers. The division shall establish by rule minimum requirements for warehouse facilities on premises described in permits issued under this section and for periodic site inspections by the division of such warehouse facilities.

125.54(7)(e) (e) This subsection does not apply to a cooperative wholesaler under s. 125.545.

125.54(8) (8) Duty to work in good faith. Each wholesaler has an obligation to negotiate in good faith with any manufacturer, rectifier, or winery that seeks to sell its products in this state through the wholesaler. To this end, all wholesalers shall work diligently to ensure that distribution channels are available for the sale of intoxicating liquor products through wholesalers to retailers in this state.

125.54 History History: 1981 c. 79; 1985 a. 5; 1989 a. 253; 1993 a. 112, 259, 491; 1995 a. 27; 2005 a. 25; 2007 a. 85; 2015 a. 10; 2023 a. 73.

125.54 Cross-reference Cross-reference: See also s. Tax 8.22, Wis. adm. code.

125.54 Annotation Section 176.05 (1a) (b) [now sub. (5)] does not prohibit a wholesaler from selling to a retailer located outside an area described in an area statement provided that the sale takes place within that area. 70 Atty. Gen. 258.

125.545 125.545 Small cooperative wholesalers.

125.545(1) (1) Definitions. In this section:

125.545(1)(a) (a) “Member” means a small winery or small manufacturer that meets the requirements established under this section for membership in a cooperative wholesaler and that has been qualified and accepted for membership in a cooperative wholesaler.

125.545(1)(ar) (ar) “Out-of-state manufacturer” means a manufacturer or rectifier of intoxicating liquor that is located in a state other than this state.

125.545(1)(b) (b) “Out-of-state winery” means a winery that is located in a state other than this state and that holds a valid direct shipper’s permit issued under s. 125.535.

125.545(1)(c) (c) “Retailer” means any person holding a “Class A”, “Class B”, or “Class C” license or “Class B” permit issued under s. 125.51.

125.545(1)(cm) (cm) “Small manufacturer” means any manufacturer or rectifier that produces and bottles less than 50,000 gallons of intoxicating liquor other than wine in a calendar year.

125.545(1)(d) (d) “Small winery” means any winery that produces and bottles less than 50,000 gallons of wine in a calendar year.

125.545(1)(e) (e) “Small cooperative wholesaler” or “cooperative wholesaler” means an entity established under this section.

125.545(1)(em) (em) “Wisconsin manufacturer” means a manufacturer or rectifier operating under a permit issued under s. 125.52.

125.545(1)(f) (f) “Wisconsin winery” means a winery operating under a permit issued under s. 125.53.

125.545(2) (2) Creation and organization.

125.545(2)(a) (a)

125.545(2)(a)1. 1. A cooperative wholesaler may only be created as provided under s. 185.043 (2) and this section. Each cooperative wholesaler operating under authority of this section shall be organized under ch. 185 but shall be subject to the limitations on such cooperatives imposed by this section. Subject to subds. 3. and 4., only small wineries and small manufacturers may be members of a cooperative wholesaler. The principal purpose of a cooperative wholesaler shall be to sell and distribute intoxicating liquor manufactured, blended, or mixed, and also bottled, by its members.

125.545(2)(a)2. 2. Notwithstanding s. 185.08 (1), a cooperative wholesaler shall include in its articles of incorporation under ch. 185 a single location for its agent and principal office, which location shall be in this state.

125.545(2)(a)3. 3. A small winery may become a member of a cooperative wholesaler only if all of the following apply:

125.545(2)(a)3.a. a. The small winery holds a direct shipper’s permit under s. 125.535.

125.545(2)(a)3.b. b. The small winery is certified by the division under sub. (6) (a) as a small winery.

125.545(2)(a)4. 4. A small manufacturer may become a member of a cooperative wholesaler only if the small manufacturer is certified by the division under sub. (6) (a) as a small manufacturer.

125.545(2)(b) (b) In addition to the requirements specified in s. 185.31 for the board of directors of a cooperative wholesaler, a director representing a member that is a Wisconsin winery or Wisconsin manufacturer shall be either an owner or an employee of that Wisconsin winery or Wisconsin manufacturer. If any out-of-state winery or out-of-state manufacturer is a member of the cooperative wholesaler, at least one director shall be either an owner or an employee of an out-of-state winery or out-of-state manufacturer that is a member of the cooperative wholesaler.

125.545(2)(c) (c) Notwithstanding any provision of ch. 185, a cooperative wholesaler may not employ any owner or employee of a member. However, an individual that is an owner or an employee of a member may act as a volunteer to assist that cooperative wholesaler in the sale and distribution of intoxicating liquor to retailers and other wholesalers in the manner authorized under this section.

125.545(3) (3) Authorization and activities.

125.545(3)(a) (a)

125.545(3)(a)1. 1. Within 7 days after filing its articles of incorporation under ch. 185, a cooperative wholesaler shall apply to the division for a wholesaler’s permit under s. 125.54. The provisions of s. 125.04 (5) (c) and (6) shall apply to a cooperative wholesaler as if the cooperative wholesaler were a corporation or a limited liability company and, for each of these provisions, the division shall determine whether the cooperative wholesaler is most similar to a corporation or a limited liability company in the context of that provision and apply that provision to the cooperative wholesaler accordingly.

125.545(3)(a)2. 2. Notwithstanding s. 125.54 (6), the division may issue not more than one wholesaler’s permit to any cooperative wholesaler. The division may not issue more than a total of 6 wholesalers’ permits to cooperative wholesalers in this state. Except as provided in subd. 2m., the division may not issue any new wholesaler’s permit to a cooperative wholesaler after December 31, 2008, but may renew wholesalers’ permits that were initially issued to cooperative wholesalers prior to that date.

125.545(3)(a)2m. 2m. The division may issue new wholesalers’ permits to cooperative wholesalers after January 1, 2025, but not later than August 1, 2025, and may renew wholesalers’ permits that were initially issued to cooperative wholesalers during this period. The division may not issue new wholesalers’ permits under this subdivision that cause the total number of wholesalers’ permits issued to cooperative wholesalers in this state to exceed 6.

125.545(3)(a)3. 3. No cooperative wholesaler may operate in this state without a wholesaler’s permit.

125.545(3)(b) (b)

125.545(3)(b)1. 1. Notwithstanding s. 125.54 (1), and except as provided in subd. 3., a cooperative wholesaler issued a wholesaler’s permit under par. (a) is authorized to sell and distribute only intoxicating liquor. Except as provided in subd. 3., a cooperative wholesaler may not sell or distribute any alcohol beverages, or any other product, except intoxicating liquor.

125.545(3)(b)2. 2. A cooperative wholesaler shall purchase intoxicating liquor from its members to be resold to retailers and other wholesalers. Notwithstanding s. 125.69 (5), a cooperative wholesaler may not purchase intoxicating liquor from any person other than a member. A cooperative wholesaler may not resell or distribute intoxicating liquor unless it has been purchased from a member. Notwithstanding s. 125.54 (1), a cooperative wholesaler may not sell or distribute intoxicating liquor except to a retailer or to a wholesaler holding a permit under s. 125.54.

125.545(3)(b)3. 3. A cooperative wholesaler may purchase ancillary industry trade goods such as bottles, corks, and other supplies used by wineries or manufacturers in the bottling and sale of intoxicating liquor if such trade goods do not include any alcohol beverages. Any industry trade goods purchased by a cooperative wholesaler under this subdivision may be offered for resale to the cooperative wholesaler’s members or to any winery or manufacturer that was formerly a member of the cooperative wholesaler.

125.545(3)(b)4. 4. A cooperative wholesaler shall work with all of its members on evenhanded terms. Any preferential treatment by a cooperative wholesaler for the benefit of a member that is a Wisconsin winery or Wisconsin manufacturer, and any discrimination against a member that is an out-of-state winery or out-of-state manufacturer, is prohibited.

125.545(3)(c) (c) Neither a cooperative wholesaler nor its members are subject to any restriction on dealings under s. 125.69 (1) between wholesalers and wineries or manufacturers. Except as provided in s. 125.54 (7) (e) and as otherwise provided in this section, all provisions of this chapter and ch. 139 that apply to a wholesaler issued a permit under s. 125.54 also apply to a cooperative wholesaler issued a permit under s. 125.54.

125.545(4) (4) Exclusive distribution. A member of a cooperative wholesaler may make its intoxicating liquor available for purchase by a retailer or another wholesaler only through the cooperative wholesaler of which it is a member. A member of a cooperative wholesaler may not sell its intoxicating liquor directly to any other wholesaler or directly to a retailer.

125.545(5) (5) Biennial reports. With each application for renewal of a wholesaler’s permit issued to a cooperative wholesaler, each cooperative wholesaler shall file with the division, in the form and manner prescribed by the division by rule, a biennial report that includes detailed information on its members, board of directors, and sale and distribution activities.

125.545(6) (6) Division certification and rule making.

125.545(6)(a) (a)

125.545(6)(a)1. 1. The division shall, upon application, certify eligible applicants as small wineries or small manufacturers and renew prior certifications of eligible applicants as small wineries or small manufacturers.

125.545(6)(a)2. 2. Any winery seeking to become a member of, or to maintain its membership in, a cooperative wholesaler may apply to the division for certification as a small winery. If the winery meets the definition of a small winery under this section, satisfies the requirement under sub. (2) (a) 3. a., and submits any other information that the division determines is necessary to certify that the winery is operating as a small winery and is eligible for membership in a cooperative wholesaler, the division shall certify the winery as a small winery. This certification shall remain valid for one year.

125.545(6)(a)2m. 2m. Any manufacturer seeking to become a member of, or to maintain its membership in, a cooperative wholesaler may apply to the division for certification as a small manufacturer. If the manufacturer meets the definition of a small manufacturer under this section and submits any other information that the division determines is necessary to certify that the manufacturer is operating as a small manufacturer and is eligible for membership in a cooperative wholesaler, the division shall certify the manufacturer as a small manufacturer. This certification shall remain valid for one year.

125.545(6)(a)3. 3. In certifying any winery under subd. 2., the division shall classify the winery as either a Wisconsin winery or an out-of-state winery.

125.545(6)(a)3m. 3m. In certifying any manufacturer under subd. 2m., the division shall classify the manufacturer as either a Wisconsin manufacturer or an out-of-state manufacturer.

125.545(6)(a)4. 4. The division shall refuse to certify under this paragraph any winery or manufacturer that cannot demonstrate it holds all necessary permits for its operations or that the division finds is otherwise not in full compliance with the laws of this state.

125.545(6)(b) (b) The division shall promulgate rules to administer and enforce the requirements under this section.

125.545(7) (7) Penalties.

125.545(7)(a) (a) Any winery or manufacturer that sells or distributes its intoxicating liquor directly to a retailer, rather than through a wholesaler or cooperative wholesaler, is subject to a fine of not more than $10,000 and revocation of all of its permits by the division under s. 125.12 (5).

125.545(7)(b) (b) Any cooperative wholesaler that provides preferential treatment to a Wisconsin winery or Wisconsin manufacturer or discriminates against an out-of-state winery or out-of-state manufacturer is subject to a fine of not more than $10,000 and revocation of its wholesaler’s permit by the division under s. 125.12 (5).

125.545 History History: 2007 a. 85; 2011 a. 175; 2023 a. 73.

125.545 Cross-reference Cross-reference: See also s. Tax 8.05, Wis. adm. code.

125.55 125.55 Combination permits.

125.55(1) (1) The division may issue a combination manufacturer’s and rectifier’s permit.

125.55(2) (2) A combination manufacturer’s and wholesaler’s permit may not be issued. A combination rectifier’s and wholesaler’s permit may not be issued.

125.55 History History: 1981 c. 79; 1995 a. 27; 2007 a. 85; 2023 a. 73.

125.56 125.56 Sacramental wine.