Not in the mix, and the Problem with citrus
The Clubs of Pubs

The three tier system: necessary?

This story in the Modesto Bee discusses the three tier system that keeps alcohol producers, distributors, and retailers legally separated. The story is concerned with all the exceptions that have to be granted to the law each year, such as:

When, for instance, the Bronfman liquor family (Seagram's) bought Universal Studios some years back, it had to obtain a tied-house law exemption because Universal City restaurants sold liquor. When movie director Francis Ford Coppola, who owned a winery, wanted to open a restaurant, he had to do the same.

And the argument here is that the law is silly because it creates all this work granting exceptions, and lobbyists and lawyers to go along with it. But the three tier system is a much bigger problem than that. I like this quote from the story:

A recent Department of Alcoholic Beverage Control appraisal of the law says it all: "A Gordian knot of sometimes inconsistent laws and policies which may or may not reflect the needs and realities of the modern marketplace."

I agree completely, and I don't even know what a Gordian knot is. Producers are getting screwed because they have to go through distributors to get to retailers. The large distributors are consolidating like crazy right now, and this means that little brands don't get picked up in the portfolio of these large companies. The small producers who do get picked up by distributors are often responsible for their own sales, which is supposed to be the job of the distributor. Consumers and retail outlets get screwed that they can't get the brands they want because they're not distributed. But without distributors pushing products, many of them wouldn't make it onto store or bar shelves at all.

In the age of the internet, shouldn't you be able to get the products you read about that are available in other states, or even other parts of the same state?

I've largely avoided talking about the industry-side stuff here on Alcademics, but the industry-side stuff is really screwed up. The question is: is it something you're interested in reading about/discussing?


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Steve Raye

Camper: The Drinks Business (global drinks mag published in the UK) just did a feature story on the subject focused on the Southern/Glazer's deal. I'll forward a copy of the article to you for distribution if any of your readers are interested. Also, Rudy Ruiz, Exec. VP of Southern will be speaking at our upcoming U.S. Drinks Conference 2008 next month in London on the subject. Media registration is free and you're invited to attend, however we can't pay for your travel. I will be writing up a summary of Rudy's comments on my blog and will share it with you as well when I get back.

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