Billions of dollars of revenue flow into state tax coffers from sales of beer, wine and distilled spirits. The single most efficient way devised by states to insure 100 percent collection of this massive amount of revenue is to require that all beverage alcohol enter its borders through a licensed wholesaler, who is responsible for paying all alcohol excise taxes. Collection of sales taxes also is assured since the retailer can only buy from a licensed wholesaler, who must record all sales to retailers. The state would have to create a tax collection and audit system that would be prohibitively expensive and easily evaded. The System Preserves Consumer Choice Consumer choice in the United States has narrowed dramatically, particularly for consumable items like soft-drinks and packaged foods.
Beverage alcohol is an exception.
Hundreds of brands of beer, wine and liquor from all over the world are readily available to consumers at competitive prices. These choices are the direct result of the licensed three-tier distribution system. Consumer choice would suffer if retailers were owned or controlled by a supplier or distributor, as they would feature only the brands offered by these suppliers and exclude others. The System Assures Responsible Marketing Practices Throughout American history, beverage alcohol products have been socially sensitive - they are the only consumer product subject to two U.S. Constitutional amendments. The public expects their government to impose reasonable restraints on the marketing and sale of beer, wine and liquor.