Three-Tier Beverage Distribution System

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Prohibition marked a unique period in American history. Between 1920 to 1933, the sale, manufacture, and transportation of alcohol for consumption were banned nationally as mandated by the 18th Amendment to the United States Constitution. Temperance movements throughout the U.S. during the 19th century brought about significant pressure on lawmakers and some states had already enacted statewide prohibition prior to the ratification of the 18th Amendment.

However, as the Great Depression wore on, Prohibition became increasingly unpopular, especially in the large cities. When repeal was finally enacted in 1933, Prohibition had brought about several notable effects: The first was the significantly lower number of breweries that re-opened - only half - than had existed prior to Prohibition. Wine historians point out that the Prohibition affected the fledgling U.S. wine industry as thicker-skinned grapes that could be easily transported replaced wine-quality grape vines. Lost too was the collective knowledge of wine makers who either emigrated to other wine-producing countries, or left the wine making business altogether. The post-Prohibition period, however, saw the introduction of the American lager style of beer, which dominates today. Most interestingly is the belief by some historians that the alcohol industry accepted stronger regulation of alcohol in the decades after the repeal, to reduce the return of Prohibition.

Benefits of the Three-Tier System

Following the repeal of Prohibition, a three-tier system of alcohol distribution was set up in the United States. The three tiers are producers, distributors, and retailers. A producer sells to a distributor who must sell only to a retailer. According to the Beer Institute, each state has created a three-tier system of beer distribution. Producers can include brewers, wine makers, distillers, and importers. The distributor tier is made up of more than 2,500 licensed businesses that store and deliver beer at...
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