An Alternative to the Three Tier System
The Ninth in a 10-Part Series on the Three-Tier System of Alcohol Regulation
This is the eighth of a 10-part series examining the Three-Tier System of alcohol distribution in the United States. It is my intent to examine the details, history, impact, politics, and alternatives to this uniquely American set of alcohol laws.
The nearly 100-year-old practice of requiring producers of alcohol to sell their products to wholesalers in a state, who, in turn, are the only suppliers of alcohol to retailers and restaurants in that state (a fundamental tenet of the Three-Tier System) does not serve the modern producer, the 21st-century retailer, nor the contemporary consumer. Instead, this antiquated TTS, or regulating the distribution of alcohol primarily serves the very largest producers and enriches and protects, and empowers a very small set of behemoth wholesalers.
This inefficient system of alcohol regulation can be reformed for the benefit of all. However, to imagine alternatives to this system it is necessary to first ask what ought to be the objective of state-based regulation of alcohol sales and distribution.
Recall from an earlier installment of this series that the TTS was implemented in most states after Repeal of Prohibition in the 1930s as a means to prevent a return to the “Tied House” system that existed before prohibition. In that system, producers controlled, owned, or exerted significant pressure over taverns. Generally, one brand of beer was sold in these taverns that were “tied” to a single producer. Moreover, the taverns, which often served as the social heart of communities and people in urban areas, engaged in unethical and excessive marketing and sales practices that successfully encouraged overconsumption. This in turn led to significant social degradation while ending lives, families, and human potential.