Compromise on Wisconsin bill.

AP -- Wisconsin beer wholesalers and small brewers have reached a compromise on legislation the brewers had opposed.

The bill on which the agreement was reached Monday would still require brewers to grant exclusive distribution territories to wholesalers, who buy beer from brewers and then sell it to taverns, liquor stores and other retailers.

But the compromise would allow a small brewer to bypass wholesalers to make direct deliveries to retailers in certain situations. That would apply when a wholesaler faces a business interruption, such as bankruptcy, that breaks the distribution link between breweries and retailers.

Brewers would also be allowed to make direct deliveries to festivals, as well as emergency shipments to retailers running short on beer.

"It's a good thing for us," said Russ Klisch, president of Lakefront Brewery in Milwaukee. "It gives us more flexibility."

Deb Carey, president of New Glarus Brewing Co. who said the original proposal "was just killing us," agreed with Klisch about the compromise.

The original proposal would have been forced brewers to maintain separate warehouses if they ship beer directly to retailers. Brewers would have been exempt from that provision if they produce fewer than 100,000 barrels of beer annually or sell fewer than 30,000 bbls. direct to retailers.

Wisconsin law now allows in-state brewers to ship beer direct to retailers. But the law says out-of-state brewers must have a separate warehouse if they ship direct.

Distributors have said that most of Wisconsin's small brewers produce far less than 100,000 barrels. But some small brewers are growing rapidly.

The compromise allows any brewer with production below 50,000 barrels a year to sell any amount of beer direct to retailers. Any brewer with production above 50,000 barrels could sell up to 1,000 barrels directly to retailers each year before the separate warehouse provision takes effect.