85 Years Ago, Lawmakers Gave Beer Its Second Constitutional Amendment
BY CRAIG PURSER
December 5, 2018
Today marks a monumental day in our nation’s history – a day when Americans became a little less thirsty. Eighty-five years ago, the 21st Amendment to the Constitution was ratified. This amendment repealed the 18thAmendment which had banned alcohol in the United States for 13 long, dry years. It also gave rise to one of our country’s most successful policies – state regulation of alcohol and the birth of the three-tier system of alcohol distribution.
President Franklin D. Roosevelt even reportedly celebrated with a famous toast, “What America needs now is a drink.” However, he also acknowledged that policies were needed to protect the country from the Wild West of the unregulated alcohol market which existed before and during Prohibition and fueled crime, corruption, and widespread alcoholism. In his official proclamation ending Prohibition, Roosevelt wrote, “The policy of the Government will be to see to it that the social and political evils that have existed in the pre-prohibition era shall not be revived nor permitted again to exist.”
In 1933, lawmakers’ memories were fresh with the abuses that led to Prohibition. Abuses like manufacturer-owned retail monopolies, or tied-houses, which sold high volumes of low-cost alcohol in order to maximize profits. Lawmakers understood that alcohol is different from toothpaste or potato chips, and they had the foresight to separate the production, distribution, and sale of alcohol – creating the effective three-tier system. They also recognized that our country is diverse and therefore, government closer to the people – the states – are best equipped to regulate a socially sensitive, age-restricted product like alcohol.
Placing “checks and balances” on the distribution of alcohol was intended to safeguard the public and prevent the chaos and hardship that was the catalyst for Prohibition. And while the system they put in place has evolved, it has achieved exactly what it was established to do – expertly promote competition, entrepreneurism, and consumer choice and protection.
The essential link that holds together today’s effective beer distribution system is America’s independent beer distributors. Independent distributors make sure the diverse selection of beer that consumers have come to expect gets from the brewer to the marketplace safely and efficiently. Because of the emphasis placed on quality control by beer distributors, Americans do not have to worry about purchasing tainted alcohol, which remains a serious concern in other countries that do not enjoy our sophisticated alcohol delivery system.
Beer distributors are locally owned businesses on the ground in every market in the country. They invest in state-of-the-art warehouses and temperature-controlled trucks to ensure each beer is kept at its ideal temperature on the journey to every bar, grocery, and local corner store in America. In fact, today beer distributors deliver thousands of beer choices to 600,000 plus retailers across the 50 states.
You need to look no further than the vast selection in the beer aisle or at the variety of taps at your local tavern to see there is more beer choice today than ever before. According to the U.S. Treasury Department’s Tax and Trade Bureau, in the 1980’s there were only 49 brewers nationwide. Now, there are over 6,000! This is a strong testament to the explosive opportunity fostered through the competitive three-tier system of alcohol delivery.
Local distributors also have a keen sense for what consumers want and help introduce beers to new customers and markets. This is especially beneficial for smaller, craft brewers.
Distributors invest their resources in helping to build and grow emerging beer brands. They leverage their vast distribution networks to get new products to the widest number of retailers in a cost-efficient manner. This means these burgeoning breweries don’t have to invest individually in the expensive infrastructure required to deliver beer to consumers on a large scale. This partnership also provides the smallest, upstart brewers access to the market to compete with larger, global brands on a level playing field.
Quite simply, beer distributors are the backbone of the beer industry. Across America, more than 3,000 local, family-owned, independent beer distributors employ 135,000 men and women with good-paying, career-track jobs. They contribute hundreds of millions of dollars to communities nationwide by supporting charities, local events, and philanthropic endeavors. Now, that’s something worthy of a toast.
Like the Constitution itself, America’s beer industry has only gotten better with age, thanks in large part to our time-tested independent beer distribution network. There has never been a better time to drink beer in America. And to that we say cheers!
Craig Purser is president and CEO of the National Beer Wholesalers Association in Alexandria, Va.