Posted on 09/14/2022 6:31:57 PM PDT by nickcarraway
In New York, its supermarkets can’t sell wine, and its wine shops can’t sell potato chips. In North Carolina, wine can be purchased in supermarkets, but you have to go to a state-owned store to buy spirits. And don’t expect to find sale prices on alcohol in Michigan, where minimum prices are set by the state.
Looking to buy wine, beer or spirits from an online retailer like Amazon? It’s illegal in almost every state.
Welcome to the three-tier system, the almost 90-year-old set of laws that governs how wine, beer and spirits are sold in the United States. Each state has its own laws, and if that’s not complicated enough, some state laws differ by county. It’s outdated, complicated and so confusing that it requires a special type of attorney to navigate its intricacies.
“Yes, in the modern age, it may certainly have outlived its usefulness,” says Sean O’Leary, former chief legal counsel for the Illinois Liquor Commission. “But when Prohibition ended, it seemed like the best way to protect a state that wanted more strict laws and for its citizens to have less access to alcohol.”
Prohibition, the 18th Amendment to the U.S. Constitution, was enacted in 1920. It banned the sale, manufacture and transport of alcohol in the U.S. until its repeal 13 years later, by the 21st Amendment.
The key to repeal Prohibition? Allow each state to do what it thought best. Dry states could remain dry, and wet states could sell alcohol again. The system was also designed to keep organized crime out of the liquor business, which it had controlled during Prohibition.
As the name implies, the system is made up of three tiers. Producers, the first tier, can only sell their product to distributors. Distributors represent the second tier, and they can only sell to retailers and restaurants, which make up the final tier.
Except for limited exceptions, like direct shipping for wine, which account for less than 10% of all wine sales, consumers can only buy alcohol from a retailer or restaurant.
There are a seemingly countless number of local regulations. These set anything from operating hours, restriction of sales by certain businesses, and even citizenship requirements to obtain a retail license.
That the system worked so well for so long is one reason why it’s still around today. After all, when’s the last time you’ve encountered a mob-run speakeasy? This doesn’t mean there haven’t been attempts to change it.
A 2005 Supreme Court decision loosened restrictions around buying directly from wineries. California now allows in-state producers to sell directly to restaurants and retailers. The states of Washington and Colorado have made it easier for grocers to get liquor licenses.
But the heart and soul of the three-tier system remains as it has since 1933, and federal courts regularly reaffirm its primacy.
“Since [the 21st Amendment] specifically authorized each state to regulate the sale and use of alcohol within its borders after Prohibition, judges have allowed three-tier to withstand the sort of federal judicial scrutiny that might be applied in other areas,” says Seth Weinberg, a New York City attorney whose practice includes a focus on food and beverage companies that includes alcohol.
This is why there really aren’t national liquor store chains in the same manner that there are national supermarket chains. Such liquor stores couldn’t exist in the so-called “control states” like Pennsylvania and New Hampshire, where the state owns the liquor stores.
It’s also impractical. A chain must have a licensed warehouse in each state where it operates, and it can only buy alcohol from distributors in that state. Compare that to Walmart, which has 42 massive regional distribution centers for nonalcoholic products that can ship to and from wherever and whenever it wants.
But the peculiarities don’t stop there.
If a producer doesn’t have a distributor in a state, it can’t sell its product there. A wine for sale in northern Illinois might not be available just mere feet across the border in southern Wisconsin. It’s a huge handicap for artisan wineries and craft distillers and brewers, which are usually too small to attract a distributor.
“It may certainly have outlived its usefulness.”— Sean O’Leary, former chief legal counsel, Illinois Liquor Commission
Some states, like Texas, are a hodgepodge of regulation. Parts of east and west Texas remain dry, while Houston, Austin and San Antonio are wet. In Dallas, liquor stores aren’t allowed in one part of the city, but they’re welcome in another.
Direct shipping, where consumers buy directly from a producer, is illegal almost everywhere in regards to beer and spirits. And though 45 states allow residents to buy wine from producers in other states, state laws vary considerably. There may be limits on how much wine that consumers can buy, for example. Since these laws can be so different, some producers don’t even bother. They don’t believe it’s not practical to keep up with 10 sets of state laws.
The U.S. Postal Service is forbidden by law to ship alcohol. This gives carriers like UPS and FedEx a virtual monopoly over what little consumer shipping does take place. Hence, U.S. shipping costs can be estimated at as much as 30 times higher than in the European Union.
I found it funny that I could go to a drive-thru for beer in PA...but had to go to separate stores for wine and spirits.
The Constitution does not discuss alcohol laws. Therefore it is up to the states.
If wine lovers want a Constitutional amendment let them put it forth in State Legislatures.
Otherwise we should not carve out an exemption for any industry just because it’s someone’s favorite cause.
Do we really need to go that far? Can’t individual states improve their laws?
In the 70’s going to a State Store in PA was about as much fun as a trip to the Department of Motor Vehicles. You literally ordered from a catalog like a phone book at the counter.
My first visit to RI was a shocker.
Visiting from TN.
Beer when you can find it is almost twice the price.
No wonder the state is so poor.
Of course the Constitution discusses alcohol laws. In two different Amendments, the 18th, and the 21st. It doesn’t use the word “alcohol”, but the reference to “intoxicating liquors” means alcohol.
The whole reason the alcohol laws are left up to each State is because the Constitution specifically says so. Section two of the 21st Amendment refers to importation possession and sale in a state and “the laws thereof”, meaning the laws of the particular state.
The 21st Amendment says:
Section 1
The eighteenth article of amendment to the Constitution of the United States is hereby repealed.
Section 2
The transportation or importation into any State, Territory, or Possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.
Section 3
This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by conventions in the several States, as provided in the Constitution, within seven years from the date of the submission hereof to the States by the Congress.
Here in Connecticut, Trader Joe’s can’t sell their own brand of beer, because that would be unfair to competitors who don’t have access to it.
A classic nickcaraway post. Thank you.
You are welcome. Thanks.
“The key to repeal Prohibition? Allow each state to do what it thought best.”
ALLOW each state ... ?
Many years ago I interviewed for a job with a distillery in Pennsylvania. Walking through a warehouse stacked to the ceiling with cases of booze was quite an experience for someone just out of college. The manager told me that, if he wanted to bribe me with some liquor to work for him, he would have to go to a state store and buy it - so close was the state’s control on his inventory.
I agree there should be uniformity. It can be done by the States similar to concealed carry reciprocity.
In our state grocers wanted to sell wine. But liquor stores said it was not fair because they could only sell alcohol and not on Sunday. You couldn’t even buy a corkscrew at the liquor store.
So as a compromise the government allowed liquor stores to open on Sunday (logical because we have a large Jewish population) and be able to carry other items besides alcohol (which I like, the wine stores now sell cigars, great because I’m a cigar and not a wine or liquor lover).
Then grocers could sell wine.
But if you had enough uniformity among states similar to concealed carry this would be less of an issue. State governments could do it themselves.
It’s not worth a constitutional amendment. Prohibition was an embarrassment on an otherwise fantastic document.
I’d rather have a bottle in front of me than a frontal lobotomy.
Here in PA:
State Stores (ABC) sell only spirits & wine.
Certain convenience stores can sell only beer.
Beer stores can sell only beer and “hard” soft drinks.
I quit drinking 1/9/11.
Actually, Amendment XXI does so, SPECIFICALLY, exempting the alcohol trade from normal interstate commerce protections in Section 2: "The transportation or importation into any State, Territory, or Possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited".
I remember as a kid going with my uncle to a state run liquor store in Iowa. The dingy building had the counter and liquor stock literally behind chicken wire. Items and prices were on a chalk board and customers had to write their purchase choice on a slip of paper which they would hand to a clerk behind the netting along with the cash. Purchases were dutifully recorded in a customer’s state issued liquor book and officially stamped. There was no liquor by the drink and there were key clubs where your liquor could be stored in a locker to be retrieved by employees who the served your mixers and you mixed the liquor yourself.
When I moved to Iowa in the late 1970s liquor and wine was only available in state run stores. While these stores allowed you to make selections off the shelf, they were still run with a Prohibition mentality. I remember standing in long lines to get my holiday wine and passing an armed guard at the door since all purchases were strictly cash.
Texas has some funny liquor laws. There are dry counties. I used to live where I had to drive 20 miles to get it. When I lived in Hurst, there was only beer. I had to go up into grapevine to get wine and malt liquor, but no liquor. I had to drive south into Fort Worth to get liquor. Now I am on meds for arthritis, kind of glad I cant drink anymore.
State Stores (ABC) sell only spirits & wine.
Certain convenience stores can sell only beer.
Beer stores can sell only beer and “hard” soft drinks.
Many chain supermarkets (Weis and Giant in the midstate) can sell wine, beer, and malts.
Bars can sell up to two six-packs to go.
And so?
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