003. Purchasing and accepting beer

Ok, so now we’re getting into the actual Certified Beer Server exam materials.

This section of my study notes covers Part I. A. Purchasing and Accepting Beer. This section is about the three-tier system for alcohol distribution in the U.S.

There are 5 parts to the Certified Beer Server syllabus:

  1. Keeping and Serving Beer
  2. Beer Styles
  3. Beer Flavor and Evaluation
  4. Beer Ingredients and Brewing Processes
  5. Pairing Beer with Food

There are 7 sections to Part I. Keeping and Serving Beer:

  1. Purchasing and accepting beer
  2. Serving alcohol
  3. Beer storage
  4. Draft systems
  5. Beer glassware
  6. Serving bottled beer
  7. Serving draft beer

Check out this post for a more detailed looked at the reading list just for Part I. The syllabus pulls material from many different sources. We are not required to read all of every source. That post specifically describes what parts of each piece we need to read for this exam.

Purchasing and accepting beer

The suggested reading materials for this section is just the first paragraph of the Wikipedia article, Three-tier (alcohol distribution). That paragraph briefly describes the three-tier alcohol system in the U.S.

However, the syllabus says that we should also know the reasons for its existence and some exceptions to the system.

Here’s an overview of the three-tier alcohol system in the U.S. as described by the syllabus and the Wikipedia article.

The three-tier system

In the U.S., there is a three-tier system for alcohol distribution.

The three tiers are:

  1. Producers
  2. Distributors
  3. Retailers

Another way to look at it is:

  1. Producers sell to distributors
  2. Distributors sell to retailers
  3. Retailers sell to consumers

The producer is the brewery. They make beer for sale to consumers, but they’re not allowed to sell directly to consumers. So they have to sell to a distributor.

An importer can also be considered a producer. They, too, are not allowed to sell directly to consumers, they must sell to a distributor.

The distributor is the wholesaler. They’re also not allowed to sell directly to consumers. They buy from the brewery and sell to the retailers.

The retailers sell to consumers, that is, the person who will finally drink the beer. Retailers aren’t allowed to buy directly from the brewery or an importer, they must buy from the “middleman,” the distributor.

There are 2 types of retailers:

  1. On-site, such as a tavern or restaurant (the beer is consumed on-site)
  2. Off-site such a liquor store or grocery store (the beer is taken away to be consumed off-site)

Exceptions to the three-tier system

There are exceptions to the three-tier system.

The U.S. government required the establishment of the three-tier system. (I’ll explain why below.) However, they left it up to the individual states to say exactly how it would look. So some states do it a little bit differently, some states allow exceptions.

Most states allow brewpubs to sell directly to the consumer. In most states a brewpub is not required to sell to a distributor. So you see, a brewpub is a producer and also a retailer.

Many states also allow small breweries to self-distribute. It’s kind of whacky. Like, a brewery is required to sell to a distributor, but wait, they’re don’t have to… Whatever.

There are also some state-specific rules about relationships between the tiers.

For example, producers are sometimes prohibited from giving promotional items to retailers. Tiffany Adamowski, owner of 99 Bottles beer store, talked about this in MicroBrewr podcast episode 29.

In some states, a distributor is responsible for cleaning draft lines. But in other states they’re not allowed to.

History and reasons for the three-tier system

The Twenty-first Amendment to the United States Constitution repealed Prohibition in 1933. States wanted ways to “regulate and control the alcohol industry,” says Wikipedia, “lest it return to the excesses and abuses that led to the Prohibition.”

“Before Prohibition, many bars were owned by brewers or distillers. Temperance advocates blamed these bars for some of the ills associated with drunkenness, and believed that keeping the producers away from the business of selling directly would help society.” (White, David. “Wholesale Robbery in Liquor Sales.” New York Times. April 3, 2011. Accessed October 17, 2014.)

Of course, states also wanted to get tax money from alcohol sales.

A couple of interesting things about the 21st Amendment

The 21st Amendment repealed the 18th Amendment, which banned alcohol in 1919. The 21st Amendment is the only amendment to repeal another amendment. It is the only amendment to be ratified by “state conventions.”

The 21st Amendment has been interpreted to allow states to regulate alcohol all on their own. Thus, many states continued to ban alcohol entirely, or just ban bars.

Mississippi banned alcohol until 1966. Kansas banned public bars until 1987. Who knew! (Wikipedia: Twenty-first Amendment to the United States Constitution)

Be on guard!

A federal law proposed in 2011 would have allowed states to prohibit sales of alcohol from out-of-state sources.

The 21st Amendment said that states could ban imports of alcohol from another state, only if they banned exports of alcohol from their own state. The proposed law would have allowed states to regulate in-state sales differently from out-of-state sales.

So if the federal law had passed and if your state had enacted its own law, it might not be so easy to get your favorite out-of-state beer anymore. Luckily, the law didn’t make it out of Congress.

Laws have a way of coming back around again, especially when the alcohol wholesale industry has a $14.9 million lobby over the past decade. So stay informed and let your elected officials know how you feel about this law.

Sources:

Wikipedia, Three-tier (alcohol distribution). Accessed October 17, 2014.

White, David. “Wholesale Robbery in Liquor Sales.” New York Times. April 3, 2011. Accessed October 17, 2014.

Okay we covered the first step. Now let’s get into serving beer to the customers. And we have to talk a little about the legalities, liabilities, and how to cut off drunk customers.

Flashcards for this section

Based on the reading materials mentioned and notes above, here are my flashcards for this section.

Three-tier system of alcohol distribution

  1. Producers/Importers
  2. Distributors/Wholesalers
  3. Retailers (on-site and off-site)

Producers sell to distributors.

Distributors sell to retailers.

Retailers sell to customers.

2 types of retailers (and 2 examples of each)

  1. On-site e.g., tavern or restaurant
  2. Off-site e.g., liquor store or grocery store

2 common exceptions to the three-tier system

  1. They produce beer and sell directly to consumers without having to go through a distributor.
  2. Small breweries are often allowed to sell directly to retailers. Commonly called “self-distribution.”

What law requires the three-tier system? When did it start?

Twenty-first Amendment to the United States Constitution.

1933.

3 reasons for the three-tier system

  1. Regulate and control the alcohol industry
  2. Prevent a return to the excesses and abuses that led to Prohibition
  3. Tax revenues

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Nathan Pierce

    I'm Nathan Pierce. I drink beer, I quit my job, and I'm planning to start a brewery. I also host a podcast about how to start a brewery. So I’m studying for Cicerone® Certification Program, Certified Beer Server exam.

    Study along with me!

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