The Three Tier System

We get the question all the time. “Can you get ‘X’ Brewery’s beer from ‘Y’ State?” or “You should really get ‘X’ beer from my hometown. They’re great!”

We love getting in new beer. And we love to hear about new beers that are available to us. Our vast and wide selection is one of the things in which we take great pride. There are just a couple of things that might stand in the way of us getting your favorite beer in stock. That main one being 3 dreaded words, the Three Tier System.

What is the Three Tier System you ask? Well, it’s a system of alcohol distribution that, well, consists of 3 tiers, or levels. It was introduced after the repeal of Prohibition as a way to keep tight control over alcohol sales and help crack down on any unfair practices or unlicensed sales, in theory.

The first Tier is obviously the manufacturer or importer. This is the company that produces the product, like a brewery, here in the US, or is the company that imports the product into the US in the case of international breweries. 

The second tier consists of what are known as distributors. These are companies that negotiate pricing, and buy the beer wholesale from the manufacturer/importer for distribution into the marketplace, usually in specific geographical areas. In many states, small producers can act as their own distributor, rather than rely on a 3rd party to sell to retail outlets.

The third and final tier is the retailer. This could be anything from a restaurant, to a bar, to a beer shop, and in some cases, public wholesale shops. Basically, the third tier is where the everyday public can buy a beer for their personal enjoyment. 

In California, most craft breweries are allowed to self distribute, if they don’t already have a contract in the geographical area they’re distributing. We’re also lucky enough in our state that the brewery doesn’t even have to deliver. As long as they have set distribution pricing for our area, we can pick up beer ourselves. You may have noticed some of the great breweries that we have on tap and in our bottle shop that you don’t typically see anywhere else in town. 

However, if a brewery doesn’t have pricing, or doesn’t have a distributor in the area, we can’t sell their beer. One of the most asked for beers in our shop is Russian River’s Pliny the Elder. Sadly, Russian River has completely cut out pricing and distribution for the Central Coast. So we’ll never have their beers in stock, that is, until they chose to expand their distribution footprint.

It could be worse though. We could be one of the dreaded states that only allow sales of alcohol through state owned stores. At the same time, we could be lucky, like Washington D.C., which doesn’t have any real distribution laws for beer. Bars and shops in the District can simply buy beer from a brewery anywhere in the country, and then simply sell it at their shops, so long as they can get the beer back without being caught violating any interstate shipping laws. 

One of the biggest downsides to the Three Tier System is how large-scale macro breweries can use it to their advantage. Many of the large conglomerates, such as AB-InBEV and MillerCoors, own distributers in states where it’s legal for them to do so. This allows them to shut out smaller, more independent breweries from certain areas where only one or two distributors exist. We’ll save those details for another blog regarding our stance on Macro Beer and their predatory practices. 

In the end, always ask us if we can get the beer you’re looking for, and we’ll happily check it out to see if it’s legally available to us. Just don’t get your hopes up for pliny any time soon. 

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