Local distilleries not reaping benefits of booming spirit ready-to-drinks

MILWAUKEE (CBS58) – Did you know when you drink your favorite ready-to-drink cocktail, you’re getting taxed 50 times higher than a malt-based ready-to-drink cocktail with the same amount of alcohol?

Whether you’re heading to a cookout or the beach, someone probably has ready-to-drink cocktails packed in the cooler.

“There’s tremendous consumer demand, particularly in the summer when people are looking for a fun, tasty, refreshing, portable, and very convenient option," said Andy Deloney, senior vice president of state public policy at Distilled Spirits Council of the United States.

Deloney says this tax is hurting the consumer.

“If we are talking about two cans of products, both 12 oz, both 5% alcohol, one is taxed at six cents per can and the other at over 30 cents per can," said Deloney.

Deloney says this all started decades ago when Wisconsin lawmakers set the tax rates for beverage alcohol.

“In many states, including Wisconsin, spirits are taxed at a much higher rate. And in Wisconsin, because these products are made with spirits, even though they have the exact same amount of alcohol, or in some cases less alcohol than a malt or beer-based product, they’re taxed significantly higher,” said Deloney.

While these drinks are rising in popularity, local spirit makers like Great Lakes Distillery in Walker's Point are not able to take advantage.

“As a distillery, it doesn't make sense for us to enter the RTD business with a tax rate that is 50 times than what the beer rate is. It just isn't financially feasible for us to do it,” said Guy Rehorst, founder of Great Lakes Distillery.

Rehorst says he is not alone in wanting to jump on this opportunity.

"A lot of businesses in this state would expand into RDTs if they could," Rehorst explained.

Deloney says change begins with educating lawmakers about these products and the impact.