Despite evidence that there may be cracks forming in its foundation, the three-tiered alcohol distribution system continues to control the American booze market. Tom Bruce-Gardyne takes a look at the post-Prohibition relic for The Spirits Business:
"True to its name, the United States is an amalgam, especially in matters of alcohol. “Every state is different,” says Dave Wilson, president of Patrón Spirits International, “and so at times it feels almost like we’re managing 50 different countries within the US.” These differences were enshrined in 1933 in the 21st Amendment that ended Prohibition. Since then, booze has been almost entirely regulated and taxed by individual states, with everything from dry counties like Moore County, the home of Jack Daniel’s, to the drive-by Daiquiri stands of Louisiana.
Prohibition also spawned America’s notorious three-tier distribution system whereby every bottle passes from distiller or importer to distributor or wholesaler to retailer or bar owner. Writing in the Washington Monthly in 2012, Tim Heffernan summed up the motives behind it: “By deliberating hindering economies of scale and protecting middlemen in the booze business… [it] was designed to be wilfully inefficient.” It was also meant to prevent UK-style vertical integration such as brewery-owned pubs, although cracks are beginning to appear..."