National Association of Wine Retailers called on state legislatures to “consider if the benefits of the three-tier system outweigh its costs to competition and study markets without a three-tier system’ for it is that very ‘three-tier system’ of alcohol distribution with its state mandate that alcohol flow through wholesalers that leads to thousands upon thousands of products being restricted from state markets.
The comments were in response to last week’s Treasury Department report on ways to enhance competition in the bev/al business.
“The required use of wholesalers causes independent retailers to race to the bottom on price since all are selling the same wholesaler-provided products, rather than competing on unique inventory offerings that would better serve the customer and the health and safety needs of communities.
“The NAWR also appreciates the emphasis the report on competitiveness placed on Direct-to-Consumer sales and shipments, which has led to the huge increase in domestic wine, beer, and spirit producers by giving them a profitable path to market, rather than having to rely on wholesalers that too often ignore the needs of small, artisan producers,” the report said. “It was disappointing, however, but not wholly surprising, to see no mention in the report of many states’ protectionist and anti-competitive laws barring direct to consumer interstate shipments by retailers. These often-unconstitutional bans on retailer direct shipping are the single greatest deterrent for consumers accessing the wines they want. However, we recognize that barring federal legislation, this obstacle to a fair and competitive marketplace must be addressed at the state level.”