| Prohibition marked a unique period in American | | | | importers to consumers through licensing |
| history. Between 1920 to 1933, the sale, | | | | requirements and legal obligations on companies who |
| manufacture, and transportation of alcohol for | | | | transport, deliver and sell beer. This system of |
| consumption were banned nationally as mandated by | | | | checks and balances eliminates the economic |
| the 18th Amendment to the United States | | | | incentive for illegal manufacturing, diversion and |
| Constitution. Temperance movements throughout the | | | | distribution of beer. Finally, consumers benefit from |
| U.S. during the 19th century brought about significant | | | | the healthy competition and facilitation of a wide |
| pressure on lawmakers and some states had already | | | | selection of brands in the marketplace - from |
| enacted statewide prohibition prior to the ratification | | | | big-name breweries to specialized, small-batch |
| of the 18th Amendment. | | | | operations. |
| However, as the Great Depression wore on, | | | | Central to the system are America's beer distributors. |
| Prohibition became increasingly unpopular, especially in | | | | Typically, producers give distributors exclusive rights |
| the large cities. When repeal was finally enacted in | | | | to market their product within a geographical region |
| 1933, Prohibition had brought about several notable | | | | to restrict two distributors of the same product from |
| effects: The first was the significantly lower number | | | | competing against one another. An important link to |
| of breweries that re-opened - only half - than had | | | | sustaining America's beverage licensees in every |
| existed prior to Prohibition. Wine historians point out | | | | state, distributors add value to every product handle. |
| that the Prohibition affected the fledgling U.S. wine | | | | For instance, every $1 spent on beer distribution |
| industry as thicker-skinned grapes that could be easily | | | | generates .25 cents in federal tax revenue and nearly |
| transported replaced wine-quality grape vines. Lost | | | | .14 cents in state and local taxes. Distributors help |
| too was the collective knowledge of wine makers | | | | raise more than $5.2 billion in federal state excise |
| who either emigrated to other wine-producing | | | | taxes on the product itself. |
| countries, or left the wine making business altogether. | | | | Beer distributors also help businesses grow by |
| The post-Prohibition period, however, saw the | | | | reducing expenses and expanding profitability. In total, |
| introduction of the American lager style of beer, | | | | distributors reduce retailer operating costs by nearly |
| which dominates today. Most interestingly is the belief | | | | $50 for every $1,000 spent on beer by consumers. |
| by some historians that the alcohol industry accepted | | | | For example, a store chain comprised of 1,000 stores |
| stronger regulation of alcohol in the decades after | | | | can realize a saving of $17,318,007 in retailer costs. |
| the repeal, to reduce the return of Prohibition. | | | | Those savings can be reinvested by retailers into job |
| Benefits of the Three-Tier System | | | | creation, business expansion, and customer savings. |
| Following the repeal of Prohibition, a three-tier system | | | | In addition to benefiting retailers, the economic |
| of alcohol distribution was set up in the United States. | | | | contributions of distributors also reaches packaging |
| The three tiers are producers, distributors, and | | | | manufacturers, shipping companies, and the |
| retailers. A producer sells to a distributor who must | | | | agricultural sector. |
| sell only to a retailer. According to the Beer Institute, | | | | This system of checks and balances also extends to |
| each state has created a three-tier system of beer | | | | the community. The brewing industry spends more |
| distribution. Producers can include brewers, wine | | | | than $50 million annually promoting responsible |
| makers, distillers, and importers. The distributor tier is | | | | consumption through a variety of efforts aimed at |
| made up of more than 2,500 licensed businesses that | | | | servers, parents, teachers, and communities. For |
| store and deliver beer at the local level. The retail | | | | example, CITY Beverage-Chicago, an Anheuser-Busch |
| level represents hundreds of thousands of outlets | | | | distributor, sponsors the "Street Smart" program in |
| that sell beer to the public. | | | | Chicago-area high schools. The programs are |
| The three-tier system enables states to track the | | | | strategically timed for the period immediately before |
| actual movement of beer from the producers and | | | | the high risk season of proms and graduations. |
