Voices for Reason - Lawmakers Should Eliminate “Three Tier” Controls on Beer, Not Extend Them | The Ayn Rand Institute

Lawmakers Should Eliminate “Three Tier” Controls on Beer, Not Extend Them

For years, many craft brewers in Florida have been directly working with the stores that sell their products. But now Florida lawmakers are entertaining a bill that will make such direct dealings illegal, forcing craft brewers to instead use state-licensed distributors as middlemen. This bill will force more craft brewers into the existing “three tier system” of controls on alcohol distribution, which legally forbid brewers from transporting and selling their own products and artificially fracture the beer business into three separate tiers: state-licensed brewers, state-licensed distributors, and state-licensed retailers.

Consider what these regulations mean in practice. Instead of having the freedom to hire a distributor if they want to, brewers are forced to use a middleman regardless of whether it makes sense for their business. This can be costly for brewers because they might get better prices on their beer by dealing with stores directly. This can also greatly limit a brewer’s ability to get his products on shelves, since he is forced to depend on middlemen to market and sell his beer — middlemen who may be carrying many competing products.

What’s the reason for imposing these restrictions? There is basically no good reason. Some distributors want a cut of the craft beer market regardless of whether brewers are willing to hire them, and some lawmakers want to sneak in hidden taxes.

There is a long history to these regulations that dates back to Prohibition and the passage of the Twenty-First Amendment. But the current reality is that these controls needlessly lock-in a government-determined way of running the beer business, and outlaw attempts to do things better.

The beer industry provides millions of adults with beverages they enjoy. Other businesses in the food and beverage industry can transport and retail their own products. There is no reason to deprive brewers of this same freedom. Rather than impose this senseless system of controls on even more brewers, lawmakers should abolish them.