At the end of 2012 I decided to set a goal for 2013 of digging into the 3 tier system and reporting back on what I learned. I came into this endeavor with a set of preconceived notions about the 3 tier system that are drastically different then what I feel now. Throughout the series of posts, I’ve tried to be as objective as possible and present the views of the people I interviewed. What follows are my thoughts on all those interviews and the 3 tier system as a whole.
When I started this process, I thought the 3 tier system was broken and was a way for the big beer giants to hold down craft beer. I felt like it was a holdover from prohibition aimed solely at trying to stop a resurgence of organized crime related to the production, distribution, and sale of alcohol. All I knew about the 3 tier system at the time was that there were producers, distributors, and retailers all separated from each other and limited in how much of the other levels they could own. All of which is to say I knew very little and had bad preconceived notions.
As soon as I began investigating the Introduction and History I realized the majority of what I knew was wrong. Moving onto the Breweries reinforced some of these new thoughts as well as introduced some new and other doubts about the system. Talking to Distributors shined some light on things and began to change what I thought I knew. Finally, the Retailers gave me a vastly different perspective on what they deal with and how annoying people like me, the rare-addicted-beer-hunter, can be.
After a year of investigation, I now feel that the 3 tier system is not broken. It’s not the best it could be, but it is pretty damn good. The biggest problem it has been the variations in states, but I think that’s also one of the best things it has going for it. The big beer brands have done a fair dose of damage to the separation of tiers in some states while other states have remained more resilient. I am sure that if this were one national system then it would’ve most surely been corrupted by the major brands.
I feel that the 3 tier system is one of the bigger consumer and small business protection laws that I’m aware of. Without the separation of manufacturers, producers, and retailers we would have almost no choice and small brewers would either not exist or would not be available outside their own doors. I can say this for sure thanks to the situation in the UK. They did not have anything like the 3 tier system, and the major breweries owned their distribution companies and owned the vast majority of pubs and had exclusivity agreements with stores. This resulted in bars and stores only have beers from 1 brewery and preventing the bar/store from carrying any other breweries products. This is exactly what the 3 tier system prohibits. That set the UK craft beer movement back for many years, and they have only recently begun to catch up with what’s happening in America. Though I suspect, some of the situation in the UK could be due to a more traditional mindset (not counting BrewDog).
As I’ve said I think the system is pretty solid; however, I do feel that there could be some improvements:
- Semi-standardization across states – If more states had similar laws, like ABV caps, for example, it’d make it easier for small breweries to know what they were getting into before going into that state.
- Reinforced separation of the tiers – This recently came up in Ohio as Budweiser owns a sizable chunk of a distributor up near Canton. There are laws in place to stop them from being too shitty to other breweries but still, I’m not OK with any brewery, be it a billion barrels or one barrel, owning any part of a distributor or store.
Those are relatively small gripes to have in such a massive system. It does work well. There is no doubt in my mind that without the 3 tier system, or with a nationalized 3 tier system or a weaker system, the craft beer movement would not exist. Our beer choices would be limited to the most easily mass-produced and cost-effective beers.
Please share what you’ve learned from this series of posts and what your thoughts are on the 3 tier system.