What if Amazon disrupts the heavily regulated beer industry with Whole Foods?

With Amazon's recent purchase of Whole Foods, industry observers are wondering whether the move could help shake up the antiquated post-Prohibition three-tiered legal regime present in most states. As Jason Notte writes for MarketWatch, alcohol distributors will likely use their significant political sway in state capitals to try to resist any reform efforts:

"So Amazon’s proposed Whole Foods purchase has to affect beer, right? It could, but there are many variables involved...

In the three-tier system of distribution set up after Prohibition, wholesalers (Tier 2) play a vital role in getting beer from brewers (Tier 1) to stores, bars, restaurants and other points of sale (Tier 3).

They also tend to get surly when they feel they’re being skipped, as Texas craft brewers discovered when the state passed a bill forcing brewers that produce 225,000 barrels of beer or more each year to buy back their own beer from distributors if they want to sell it in taprooms.

In North Carolina, breweries are suing the state after wholesalers encouraged lawmakers not to raise the 25,000-barrel limit for breweries distributing their own beer. By “encouraged,” we meant “gave them $1.5 million over the last four years,” but this is the same group that flat out threatened brewers over alleged non-payment of taxes..."

Read more here: http://www.marketwatch.com/story/what-if-amazon-disrupts-the-heavily-regulated-beer-industry-with-whole-foods-2017-06-22