Why can’t I buy the beers I want, no matter where I live?

Since we launched our website and more recently opened our first brick and mortar location I have been asked this question literally dozens of times every week.  The answer always raises more questions, so I thought I would take the blog post this week and try and provide a little more clarity on the issues restricting access to the beers we covet.

Right off the bat I have to address the real reason that a small brewpub in Vermont doesn’t have beer on the supermarket shelves of Michigan or Montana and simply put, that’s capacity.  Breweries can only produce so much product on their equipment at a time and it's this factor that prevents breweries like Dogfish Head or Russian River from satiating the needs of their thirsty fans across the country.  Brewers walk a very thin line with capacity since all that equipment is incredibly expensive.  To not have the demand needed to keep it humming could spell financial ruin, so expansion has to be weighed very carefully.

So now that we have what I would consider the legitimate reason behind this issue, let us look at the other issues that keep you from enjoying a Pliny or Two Hearted tonight with dinner.

In the documentary Beer Wars they talked a lot about the three-tier system, this is the system that was put in place at the end of prohibition in the United States that was supposed to help regulate the sale of alcohol from state to state.  It may have had a legitimate goal at one time, but today it is the single biggest obstacle to true consumer freedom. 

The three tier system works like this: at the end of prohibition the regulation of alcohol sales went back to the states so each state could choose to allow or to ban the sale of beer, wine and spirits. States that allowed the sales of alcohol could determine the specific conditions for that sale to take place. This is why in some states you can buy liquor in the supermarket and in others you have to go to a state owned liquor store. 

At the same time the states were taking control of alcohol regulation there were new regulations put in place that strictly defined what each cog in the alcohol production and sale machine were allowed to do.  Manufacturers of alcohol could not distribute or sell to consumers, so distributors and importers were created to buy the product from the brewers, vintners and spirits producers and then sell it to the retailers who then sold it to consumers.  Each manufacturer had to sign exclusive contracts with distributors in each state they wish to sell their product in.  These distributors then have exclusive rights to those brands in the geographic territory that they have been granted rights to by the state.

Now that all seems very tidy and even convenient for the manufacturer and the consumer but over time as the craft beer renaissance and the internet revolution have started in the United States this system has made it very difficult for consumers to get many of the most highly sought-after beers.  Now don’t get me wrong, I know that it isn’t possible for small independent breweries to market, distribute and sell their products in states across the country, they need a network of distributors to work for them so they can focus on making world class beer.  But...and this is a big but, the National Beer Wholesalers Association has used the three-tier system as a blunt instrument to prevent direct-sales of beer to consumers either over the internet or in many cases right in the brewers own state or municipality.  They have even gone so far as to push legislation in Congress that would effectively end any potential for online beer or wine sales if it passes.  H.R. 5034, also known as the Comprehensive Alcohol Regulatory Effectiveness Act of 2010 or the CARE Act has more than 100 co-sponsors in the house and the NBWA and the WSWA (Wine and Spirits Wholesalers Association) have contributed $11.55 million since 2005 to make this bill a law.  

There is good news however; many states have realized the opportunity for job creation and tax revenue that comes with a thriving craft beer industry and have begun to raise the maximum production allowed for self distribution and for on-premise sales of beer at breweries and tasting rooms.  This has allowed breweries to get their product into the hands of consumers without fighting for shelf space against the big breweries but it doesn’t do much to help consumers in other states.

At its heart, it is equally an issue with spurring tax revenue from the burgeoning craft beer market and enabling true consumer choice. Citizens should be allowed to choose which beer, wine or spirits that they want, to not have that decision made by distributors whose only concern is which product they can move the fastest and hence, help out the bottom line the most.

If you support consumer choice please contact your Congressmen and urge them to vote against H.R. 5034.