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Dear Karen: What exactly is the “three-tier system?” Sarah H. (Asheville, NC)

The so-called three-tier system can be thought of as the overall architecture for alcoholic beverage sales in the United States. The system—convoluted and confusing—separates producers, wholesalers, and retailers. The result is a complex patchwork of rules which individual states enact and enforce. The three-tier system was instituted at the end of Prohibition in 1933. In ceding control to the states, the federal government sidestepped the controversial and volatile issue of how alcoholic beverages should/could be sold. The result has been an enormous spectrum of varying approaches, from states with relatively liberal policies to states with constrictive retail monopolies.

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