In New York, its supermarkets can’t sell wine, and its wine shops can’t sell potato chips. In North Carolina, wine can be purchased in supermarkets, but you have to go to a state-owned store to buy spirits. And don’t expect to find sale prices on alcohol in Michigan, where minimum prices are set by the state.
Looking to buy wine, beer or spirits from an online retailer like Amazon? It’s illegal in almost every state.
Welcome to the three-tier system, the almost 90-year-old set of laws that governs how wine, beer and spirits are sold in the United States. Each state has its own laws, and if that’s not complicated enough, some state laws differ by county. It’s outdated, complicated and so confusing that it requires a special type of attorney to navigate its intricacies.
“Yes, in the modern age, it may certainly have outlived its usefulness,” says Sean O’Leary, former chief legal counsel for the Illinois Liquor Commission. “But when Prohibition ended, it seemed like the best way to protect a state that wanted more strict laws and for its citizens to have less access to alcohol.”
Prohibition, the 18th Amendment to the U.S. Constitution, was enacted in 1920. It banned the sale, manufacture and transport of alcohol in the U.S. until its repeal 13 years later, by the 21st Amendment.
The key to repeal Prohibition? Allow each state to do what it thought best. Dry states could remain dry, and wet states could sell alcohol again. The system was also designed to keep organized crime out of the liquor business, which it had controlled during Prohibition.
As the name implies, the system is made up of three tiers. Producers, the first tier, can only sell their product to distributors. Distributors represent the second tier, and they can only sell to retailers and restaurants, which make up the final tier.
Except for limited exceptions, like direct shipping for wine, which account for less than 10% of all wine sales, consumers can only buy alcohol from a retailer or restaurant.