The Spectacle Blog

Beer Spectator: Who Does the Three-Tier System Truly Serve?

By on 4.4.14 | 10:41AM

“I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts, and beer.” -Abraham Lincoln

As any good American knows, Prohibition tarnished almost every cultural good. The last vestiges of that oppressive regime still haunt our drinking habits.

One such vestige jumped up in Florida recently, where distributors are actively denying competition by stifling brewpubs.

 A bill in the Florida Senate

would force craft brewers to sell their bottled and canned beer directly to a distributor. If they want to sell it in their own tap rooms, they would then have to buy it back at what is typically a 30-40 percent mark-up without the bottles or cans ever leaving the brewery, according to Joshua Aubuchon, a lawyer and lobbyist for the Florida Brewers Guild. 

The rule would not apply to draft beer.

Mind you, of the top fifty largest breweries in America by sales, thirty-eight are “small and independent craft brewing companies,” according to Beer Advocate.

Wholesalers claim the bill would preserve competition. Call me cynical, but it sounds like they want paternalistic protection instead.

The system is just another terrible consequence of Prohibition.

After ratification of the Twenty-first Amendment in 1933, states started regulating production and distribution of all liquors, beers, and wines under a “three-tier system.”

A “brewer cannot be a wholesaler or a retailer. Wholesalers also may not own retail outlets. Only a retailer…can sell to the consumer,” according to The Oxford Companion To Beer.

Governments favor the status quo; it means more tax revenues.

Washington State is an exception, where wine and beer can be sold completely privately. Thus, in-state wineries and breweries sell directly to retailers if they so choose.

Thanks to President Jimmy Carter’s greatest legacy—the legalization of homebrewing—brewpubs also defy these categorizations in Florida.

Now, I grant that some independent wholesalers helped birth the craft beer movement by distributing those brews around the nation. In other countries, larger brewers control distribution. They then use that power to crush competition.

Unfortunately for them, the Zeus of craft beer has now returned to slay the distributor’s Cronus. The beer world has changed. It’s time for distributors to adapt or die.

Wholesalers should offer value by expanding markets for their local brewpubs. By supporting wasteful legislation, they only undermine their own importance.

So to sum up: Those of you in Florida, buy more craft brews and write your senators! Those of you around the country, beware of legislation arising from wholesaler lobbyists. 

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