Part I, Section A: Purchasing and Accepting Beer

Question 1

What is the Three-tier system of alcohol distribution?

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Answer 1

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.

Question 2

What are the 2 types of retailers (and 2 examples of each)?

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Answer 2

1. On-site (tavern or restaurant
2. Off-site(liquor store or grocery store)

Question 3

What are 2 common exceptions to the three-tier system?

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Answer 3

1. Brewpubs

They produce beer and sell directly to consumers without having to go through a distributor

2. Small Breweries

They’re often allowed to sell directly to retailers without having to go through a distributor. Commonly called “self-distribution”

Question 4

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

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Answer 4

The Twenty-first Amendment to the US Constitution which ended Prohibition, and was enacted in 1933.

Question 5

What are the 3 reasons for the three-tier system?

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Answer 5

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