Do we still need the three-tier system for alcohol?

Charles Cowdery writes over at the R Street blog about the three-tiered alcohol system:

The 21st Amendment to the U.S. Constitution, which repealed Prohibition, left it up to the states to regulate the distribution and sale of alcoholic beverages. The states did not have to impose a three-tier system – comprising producers, distributors and retailers – but all of them did.

While producers in many sectors rely on distributors to get merchandise to market, with alcohol, it is mandatory. By law, producers may only sell to distributors and retailers may only buy from distributors. Drinks retailers and producers may not do business with each other directly. No business in one tier may own a business in any other tier. Only retailers may sell to consumers.

What’s more, distributors are required to be in-state businesses....