benko

Recipes 

I've been trying to educate myself on this subject, and have seen some conflicting information. I'm talking about the traditional three tier alcohol distribution system put into effect in most states after the repeal of Prohibition. This means that the producer (brewer) can only sell to a distributor, who can only sell to a retailer, or some variation on that theme depending on the state. My question is, is this good or bad for small craft breweries? On one hand, a small brewery doesn't have the clout to really deal with distributers, who don't give them nearly the attention or service that their "big" clients get. Not being able to sell directly to the public or distribute yourself seems to be a bad thing for the little guys. I know that some states do allow self-distribution for breweries under a certain size.

On the other hand, some say that the three tier system prevents the "big guys" from cutting deals with the big retailers directly, preventing a monopoly.
This makes sense as well, but isn't there a little of this going on already (i.e. I read that for a while, some of the big guys threatened to pull their contracts with distributors if they didn't stop selling other beers. After the Supreme Court ruled that illegal, they started offering "incentives" to the distributors to only push their beer.)

So, is the three tier system good or bad for the little guys?

EdWort

Recipes 

I say no if it is MANDATED by law like it is in Texas. It makes it very difficult for the little guy to get started.

__________________
Cheers,

EdWort

http://img248.imageshack.us/img248/93/bcb.png

Haus Pale Ale, Bavarian Hefeweizen, Robust Porter, Oktoberfest Ale, Wounded Knee IPA, Rye IPA, BCB IPA, Kolsch, Apfelwein

Follow me on Twitter

olllllo

Recipes 

B A D

Ask yourself, what is it about this industry that it has to have this particular arrangement? Is Dell computer forced to sell to a computer distributor? Ford? GM? Farmers? Airlines? Coca Cola?

__________________
Rabbit And Coyote Schwag
Rob - Phoenix Ambassador to Milwaukee
Where did your avatar go?
Ginger Beer for Moscow Mules Bacon Vodka
Twitter

niquejim

Recipes 

But not one of those industries deal with that evil alcohol

It was started to stop monopolies, but that is no longer the problem

david_42

Recipes 

Every brewer I've talked to in Oregon says it is a major blockage to growth. Not only are you locked into one distributor, you are locked into their network. If you change to another distributor, you lose all of your existing handles (bar placements).

On the retail side, if your distributor doesn't deliver, you're hosed. And the customer that didn't get his kegs for his wedding isn't going to blame the distributor.

__________________
Remember one unassailable statistic, as explained by the late, great George Carlin: "Just think of how stupid the average person is, and then realize half of them are even stupider!"

"I would like to die on Mars, just not on impact." Elon Musk