Three Tier System

It started with the 21st Amendment

Passed by Congress February 20, 1933.
Ratified December 5, 1933.

Section 1.

The 18th article of amendment to the Constitution of the United States is hereby repealed.

Section 2.

The transportation or importance 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.


This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by conventions in the several Staes. As provided I the Constitution, within seven years from the date of the submission hereof to the States by the Congress.

The Three- Tier System

The ABWA is a critical link in the three-tier system. Wholesalers buy products from the brewers, store it, sell it and deliver it to all licensed retailers.

Prohibition ended over 60 years ago. Since that time malt beverages in the United States have been distributed according to a three-tier system composed of licensed suppliers (brewers), wholesalers and retailers. The main purpose of the system is to insulate retailers from direct and indirect control by brewers by placing an independent, wholesaler tier between them.

The creation of the three-tier system serves to protect consumers and government revenue, as well as to provide for efficient distribution of licensed beverages.

Benefits of the Three-Tier System and Beer Distributors

Generating Healthy Competition and a Robust Marketplace

Beer distributors source beer from a wide variety of importers and manufacturers. By working with numerous brewers, distributors provide a vehicle to market for the largest multinational beer brands to start-up craft brewers. Because of this system, you can order a California craft beer off a menu in Illinois; enjoy a Vermont brew in a Tennessee restaurant; and see a tap handle from Pennsylvania in a Texas bar.

The three-tier system provides the infrastructure, capital and personnel small brewers need to reach a wide network of retailers. Distributors’ infrastructure includes state-of-the-art warehouses and fleets of temperature-controlled trucks and vehicles that preserve these perishable products. Distributor personnel include not only employees that handle warehousing, transporting and delivering all types of beer to local retailers, but also sales and merchandising professionals who help promote each label of beer they sell. Distributors deliver customized inventory based on the requirements of each individual retailer in their local market.

Additionally, The value of the Three tier system includes:
• Facilitate state excise tax collections . The independent wholesaler tier is the verification system used by the state to confirm beer shipments into Alabama and to insure that the proper excise taxes are being paid.
• Produces impressive economic benefits for the state in terms of investments, taxes, high wages and benefits, and stable employment.
• Allows for effective enforcement of the Alabama Liquor Control Law and Rules and Regulations because the source of a violation can easily be traced by knowing which licensees are selling which products in which markets – this system is very efficient in protecting the public against contaminated and/or improperly labeled product.