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The American Beer & Wine Distribution System

The modern system of beer and wine distribution is an efficient three-tier system that provides consumers with immense choice, retailers with customized inventory, encourages innovation and competition in the marketplace and allows states to regulate where and how alcohol is sold, giving law enforcement effective tools to fight underage purchase and consumption.

Control of alcohol beverages and local beer and wine distribution has not always been so efficient and effective, causing alcohol to be the subject of two amendments to the U.S. Constitution.


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In 1920, Congress enacted the 18th Amendment to the U.S. Constitution: the National Prohibition Act. However, as a result of the lack of enforcement of the Prohibition Act and the creation of an illegal industry, an increase in crime transpired. The crime rate soon skyrocketed to nearly twice that of the pre-prohibition period. It can be argued that prohibition destroyed legal jobs, created black-market violence, and diverted resources from enforcement of other laws.

In 1933, the 21st Amendment was ratified, repealing the failed experiment of Prohibition. While Prohibition did not end alcohol consumption, it dramatically changed the conditions under which it was sold and consumed. Section 2 of the Amendment gives states authority to regulate the production, importation, distribution, retail sale and consumption of alcohol beverages inside their borders.

Congress recognized that the importance of maintaining effective state alcohol regulation is critical. It allows states the flexibility to deal with local circumstances. A one-size-fits-all approach to alcohol regulation simply doesn’t work. People in North Carolina¬†probably feel very differently about alcohol than those in New York. The 21st Amendment was designed to reflect local thought on the level of regulation needed for alcohol.

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