Advocacy

Consumers have more choice in the alcohol market than is available in virtually any other retail product. Consumers’ favorite drink cannot be systematically or contractually excluded from a retailer by another industry member. This practice is legal in other beverage industries and diminishes consumer choice.

Counterfeit alcohol and bootlegging have been virtually eliminated with a three-tier-system by requiring regulated distributors to purchase only from licensed manufacturers and sell only to licensed retailers. This is the exception, not the rule, around the world.

Requiring products to come-to-rest on the premises of a licensed distributor provides a place in time for auditors and regulators to locate alcohol and “count the boxes” at any given time – a feature that has been cited approvingly by taxing bodies making alcohol tax among the most likely to be collected. Distributors report sales records to the state and serve as a checkpoint for legal sales and appropriate taxation. 

Distributors provide services critical to the public interest, including:

• Tap line cleaning
• Product quality control
• Education for legal and responsible sales
• Instant recall and product ID in the event an unsafe product has reached the market

There are more brewers today than at any time in the past century. Brewing has experienced an American Renaissance during the past few decades, largely thanks to an open alcohol market created by the three-tier system, allowing all brewers to access distribution and retail networks.

The alcohol industry is highly competitive, but tied-house prohibitions keep retail markets open to all purveyors of alcoholic beverages. In South Dakota, the smallest producer has a route to market at the largest retailer. In other words, brewing, an industry with a low barrier to entry, provides truly free market access for all to all retailers. This access is unique to the alcohol market.

Distributors are free to carry products of their choice – including competing products – without fear of retaliation from suppliers. This protection, or independence, provides an incentive for distributors to market products that are most likely to be popular with consumers at any given time.

Distributor independence is key to market access for brewers and allows distributors to build brands while maintaining fair treatment and service for retailers and unparalleled choice for consumers.

Small retailers and large retailers must be treated equally by distributors on price and product promotion, leveling the playing field for both mom-and-pop shops and mega-retailers.

Retailers are free to sell alcoholic beverage products of their choice without producer influence or retribution. The law prevents direct and indirect retail control by brewers.

Distributors are not allowed to make sales directly to the public, a practice that would allow them to undercut retailers.