- Published on Tuesday, 24 July 2012 12:33
- Written by Seth Groder
Emerging from the dark ages of American beer drinking was the birth of a new system. With the passing of the 21st amendment, prohibition came to an end and not everyone was thrilled that the spigots were about to be turned back on. Some folks that started the temperance movement still had a lingering concern over how to regulate alcohol consumption if it were to become legal again.
A federal plan was devised that created a three-tier distribution system in which alcohol sales are divided into three parts: producers, distributors, and retailers. Producers make the stuff and may only sell to distributors, who in turn can only sell the products they’ve just acquired to authorized retailers, and you the consumer can only buy from those retailers. While this is a federal structure it is left to individual states to enforce, which has led to some interesting variations with its application. Some states feel it necessary to monopolize distribution channels while even stricter states also control the retail chains. There are currently 18 control states listed here with states such as Alabama, Pennsylvania, and Utah having state run dispensaries. By directly controlling these entities or subcontracting them out there is some serious constraints placed upon residents within these states.
Distributors are responsible for acquiring alcohol from manufacturers and then safely disseminating fresh beer throughout the country. The need for another middleman may be an antiquated burden in today’s world, but distributors will argue that they provide some advantages. Sustaining the whole industry of alcohol distribution obviously correlates to a certain number of jobs that keep many Americans employed today. Besides jobs, having an established supply delivery pipeline allows for a clear path to transport beer at the correct temperature and shielded from the elements, helping to ensure a quality product. Elsewhere in the world where standards may not be as high as the United States there is always a lingering question as to whether or not you are about to drink an inferior product. Since distributors have multiple suppliers, smaller beer manufacturers can have a greater reach for prospective clients by piggybacking off of some of the larger manufacture’s sales.
Retailers like to point out that an adding a third layer, distributors, to a traditional sales chain between the retailers and producers end up costing consumer more. Many distributors also have exclusivity contracts that can dissuade competition and leaves retailers at the mercy of the distributors’ available assortment. Just as a good distributor can expose the local public to a wide selection of products it is just as capable of constraining your choices. As with many doings in America things have gotten litigious and political. Multiple battles have been waged to figure out who gets the bigger chunk of your boozing money. While some salvos have already been fired there have not been any federal laws or mandates that dismantle the three tiers.
While the rules and regulations vary by state they share some common loopholes. In some states local or small time producers can avoid distribution and sell directly to retailers. One of my favorite loopholes allows for onsite sales like brewpubs. A brewpub is any establishment that brews and serves its own beer on premises. Usually to accompany some of the freshest beer you can consume there is a kitchen serving up delicious eats. Marrying a kitchen with a known beer portfolio allows the brew masters and chefs to create tight pairs between the beer and the menu. Sometimes the beers are even used as part of the recipes. If you know of any brewpubs in your area or traveling to area that has one I highly recommend you check out these bastions of awesomeness. Their existence is one of the few good things that people can agree on within this three-ring circus.
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