Most of you have heard about the three-tier system when you were at your local brewery or distillery or craft beer festival. However, if you are like most people you don’t know much about it or how it pertains to your favorite beverage provider, or how it impacts you. Let’s try to make it a little clearer.
First let’s start by explaining who is in each tier. In tier one you have the producer (a.k.a. manufacturer or supplier), in tier two you have the distributor (a.k.a. wholesaler), and in tier three you have the retailer (a.k.a the grocery store, bottle shop, bar, or liquor store). Individual state laws determine how the three tiers operate and interact with each other. In South Carolina we are a strict three-tier state. This simply means no tier may operate in another tiers function. But how strict an interpretation and application is it really?
There are a couple very notable exceptions to the strict three-tier interpretation and application in South Carolina, e.g. domestic wineries have the ability to self-distribute and breweries that fall under the Stone law have the ability to retail other manufacturers beers, ciders, wines and soon to be liquors. Could more legislation be forthcoming to ease the three tier interpretation and application in South Carolina? Time will tell.
Attached is a great article that describes the concept of the three-tier system and how it operates. Contact our Alcohol Law Practice Group to learn more and see how we can help you.