If there's one thing you need to know about the modern alcohol industry in America, it's that everything is governed by what's called the "three-tier system," which ensures that producers, distributors and retailers each play an equal part in getting a product to market. At its simplest, it requires alcohol producers to hire a distributor to sell their products for them to individual retailers. This is a controversial system in the eyes of many producers, as they'd much prefer to cut out the so-called "middle man" and sell directly to retailers.
The system was established in the years after Prohibition to prevent monopolies from regaining control of the alcohol industry and to make it easier for the government to monitor the sale and movement of alcohol. One of the biggest concerns is the rise of online sales. With more and more consumers buying their wine and spirits online, some are questioning whether the three-tier system is equipped to handle this new reality. Additionally, there are concerns about the role of big retailers in the three-tier system. In many cases, big retailers are able to negotiate better prices from wholesalers, which can put smaller retailers at a disadvantage. Some argue that this creates an uneven playing field and makes it difficult for smaller retailers to compete. People also argue that this gives the wholesalers too much power and allows them to dictate terms to the producers and retailers.
Recently, the system has begun to crack, and opponents of it are looking to a court case in Oregon that could have sweeping national impact. Oregon had a law that allowed in-state breweries to self-distribute, i.e., skip the middle tier of the three-tier system. This law, however, only applied to breweries in Oregon and forced out-of-state breweries to sell their products through a distributor.
After a lawsuit was filed, the state agreed not to enforce the law for five years during which legislators would be tasked with writing a new law that would apply to everyone. This means that for the next five years, any shop in Oregon can buy beer directly from any U.S. brewery. It may seem like a small detail, but this is a tectonic shift in the world of America's alcohol laws. Many other states have similar laws and, were they to be legally challenged, they would likely face a similar outcome to Oregon's.
The precedent for this comes from a 2005 Supreme Court decision that forbade discrimination against out of state wineries. That ruling said, essentially, that states can regulate alcohol however they wish, but that laws that apply to in-state producers also apply to out-of-state producers.
It's unclear if or when Oregon consumers will see any changes. What is clear is that breweries and retailers are likely to see higher profits.
As always, you can see what I'm drinking on Instagram at @sethebarlow and send your wine questions and quibbles to sethebarlowwine@gmail.com