Noble Experiment

Entrepreneur. Cocktail and spirit champion. Old world wine provocateur.

The Three Tier Distribution System – Leveling the Playing Field.

I feel like I need to talk about prohibition some more.  After all, this blog was named after the “noble experiment” which was just another name for prohibition. I spoke briefly to the three-tier distribution system earlier, focusing on temperance. In a nutshell, the government plan was ineffective.

In today’s rant, we’ll discuss another aspect of the three-tier distribution, the theory of the level playing field. The schtick was that this new post-prohibtion system would benefit small producers by leveling the playing field for large retailers.  Any store can get equal access to any beer.

This is a great idea in theory.  If any brewery, large or small, has access to a market, then there can be no monopolies like there were pre-prohibition.  A brewery can’t fund a bar or provide exclusive price breaks and gifts to a bar for carrying their product.  As you may recall, during the pre-prohibition era bars would throw a bunch of free beers to bars and stores in exchange for exclusivity.  The three-tier system was supposed to end that.

But as anyone who has worked in the industry knows all too well, there is not a level playing field.  Breweries do the same thing, just through different channels.  They exchange services (like draft equipment or line cleaning) in exchange for exclusive use of draft lines.  They earmark rare and hard to find cases for their favorite or best customers, effectively cutting off other accounts.  They hand out table tents, signage, glassware, tap handles and more in exchange for carrying their beers.

How can the playing field be level when In-Bev can afford to buy you draft equipment, clean it monthly, give you glassware, and make table tents and signage?  Can you local craft brewery do that? Do they have the resources? The answer is most likely not.  So every store may be able to get every beer, but the incentive to carry certain brands, which was the issue to begin with, still exists.

The impetus falls, as it did before prohibition, to the bar owner, manager or beverage buyer.  You have to make a conscious choice to clean the lines yourself.  To carry the more expensive beers.  To buy your own damn glassware. Before prohibition, you had to make that decision too.  Maybe they’ve made it slightly easier by making everyone pay the same price for Bud Light.  But the back door incentives still exist.  Post-prohibition FAIL.

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This entry was posted on May 2, 2011 by in Rants.
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