Three-tier (alcohol distribution)
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The Three-tier system of alcohol distribution is the system for distributing alcoholic beverages set up in the United States after the repeal of Prohibition. The three tiers are producers, distributors, and retailers. The basic premise of the system is that the producer must sell to the distributor who must then sell to the retailer (and only retailers may sell to consumers). Producers include brewers, wine makers, distillers and importers.
Some states chose to become alcoholic beverage control jurisdictions after Prohibition - as discussed below these states do not always fit so neatly into the "three-tier" model.
Contents [hide]
1 Exceptions and regulations
2 Dispute
3 See also
4 References
5 External links
[edit] Exceptions and regulations
States have various exceptions to this rule, the most prevalent one being the case of a brewpub, which is simultaneously a producer and retailer, and has no requirement to sell to a distributor. Some states allow an entity to have a part in two of the tiers, letting small breweries act as their own distributor, for example. Many states permit wineries to sell bottles of wine on-site to customers, and some states, such as Oregon, permit intrastate shipments of wine directly from the producer to the customer.[citation needed]
In those jurisdictions that are not alcoholic beverage control states (discussed below), both liquor stores and licensed establishments are considered "retailers" for all intents and purposes, and may buy their product directly from distributors.
Usually producers will give a distributor exclusive rights to market their product within a geographical area, so that there will not, for example, be two distributors of Anheuser-Busch products competing against each other.
Rules also vary according to what kind of relationships each of the tiers can enter in to with the other two tiers. For example, a producer may not be allowed to give promotional items or services to a retailer. Another example is that a beer distributor might be responsible for setting up and maintaining draft lines in a restaurant, or may be legally prohibited from doing so, depending on the state.
Also, several states are alcoholic beverage control states - in any of these jurisdictions state governments maintain a monopoly on the distribution tier of the system (at least for distilled beverages). Some (such as Utah and Pennsylvania) monopolize the distribution and retail tiers. Those that maintain monopolies over the distribution system only (such as Michigan) could still be said to have a three-tier system - in such states producers sell to the distributor (in these cases, the state as opposed to a private operator) who in turn sells to private retail outlets.
[edit] Dispute
Wine and Spirits Wholesalers of America (WSWA), a trade organization and lobby group based in Washington, D.C. of considerable influence,[1] that works to oppose initiatives to alter the three-tier model, contends that wholesalers perform state functions and are in the business of encouraging social responsibility concerning alcohol as well as alcohol wholesale.[2] The Specialty Wine Retailers Association (SWRA) is a group representing the wine retail industry which interests lie in direct opposition to WSWA, who advocate the free movement of wine across state lines.[3][4]
In January 2010, media attention several months ahead of the annual WSWA convention took unusual proportions when it was announced that republican vice-presidential candidate and former Alaska governor Sarah Palin was scheduled to speak on behalf of the wholesalers, in contrast to past keynote speakers who are normally notable drinks-industry figures.[5] Palin reportedly charges a speaking fee of $100,000,[6] though WSWA has not made the figure public.[7] WSWA president Craig Wolf stated, "Gov. Palin is a great supporter of America's free enterprise system and understands that industries like the beverage alcohol industry play a key role in driving our national economy. We're proud and honored to welcome her as a speaker".[6]
Critical opinions have since expressed incongruencies in the platform of the WSWA, and some opinions Palin has voiced in the past, as purportedly devoted to the free-enterprise system and a vocal critic of lobbyists.[7][8][9]
[edit] See also
Granholm v. Heald - Supreme Court of the United States case involving state's right and the three-tier distribution system.
[edit] References
1.^ Marcus, Kim, Wine Spectator (February 14, 2005). "Bizarre Coalition Opposes Direct Shipment of Wine".
http://www.winespectator.com/webfea...oalition-Opposes-Direct-Shipment-of-Wine_2398.
2.^ Nigro, Dana, Wine Spectator (October 21, 2002). "Tide Turns in Direct Shipping Battle".
http://www.winespectator.com/webfeature/show/id/Tide-Turns-in-Direct-Shipping-Battle_1465.
3.^ Arnold, Eric, Wine Spectator (November 9, 2007). "Battle Over Retail Wine Shipping Comes to a Head in the Courts".
http://www.winespectator.com/webfea...e-Shipping-Comes-to-a-Head-in-the-Courts_3882.
4.^ Teichgraeber, Tim, Decanter.com (January 15, 2008). "'Storm' of negative pr as wine.com sneaks on rivals".
http://www.decanter.com/news/174024.html.
5.^ Woodard, Richard, Decanter.com (January 14, 2010). "Sarah Palin to speak at US wine convention".
http://www.decanter.com/news/news.php?id=293881.
6.^ a b Wine Spectator: Unfiltered (January 14, 2010). "Sarah Palin's Wine Soapbox".
http://www.winespectator.com/webfeature/show/id/41572.
7.^ a b Steinberger, Mike, Slate.com (January 22, 2010). Going Rosé
8.^ Walshe, Shushannah, The Daily Beast (January 13, 2010). "Palin's Booze Hypocrisy"
9.^ Asimov, Eric, The New York Times: The Pour (January 20, 2010). "Sarah Palin's Next Convention Speech"