The Shark Has Leapt The Building: The Three Tier System and God

Posted by Tom Wark on Sep 12, 2016

“Our faith, I suggest, requires us to do everything we can to minimize harms, and in this case that would be protecting our state’s three-tier system of alcohol control.”

Thus declares the Christian Action League. Who knew. Faith in God requires one supports the Three Tier System. But wait. Is it the three-tier system in which wineries and retailers may ship directly to consumers? Is it the version of the three-tier system in which modest self distribution privileges for producers is allowed? Does God favor a three-tier system in which there are no exceptions to the wholesaler mandate? Perhaps God is in favor of price posting, but isn’t so committed to a three-tier system in which payment from retailers is required at the time of delivery. It has never been more evident that God does indeed work in mysterious ways.

In reality, the Christian Action League’s call on the faithful to support the three-tier system is actually a matter of the North Carolina Wholesalers Association reaching out to the Christian Action League, located also in North Carolina, and asking them to help them beat back a coming proposal by the state’s brewers to lift the limit on the size of the brewery that may self distribute its product. North Carolina brewers want to allow breweries that produce up to 100,000 barrels to be able to sell that beer directly to retailers and restaurants and bars themselves, rather than have to contract with wholesalers. When brewers contract with wholesalers their margins are reduced by 33%.

According to the executive director of the North Carolina Wine and Beer Distributors, “Requiring larger brewers to contract with distributors keeps a brewery from putting undue pressure on bars or retailers, thus preserving consumers’ choice.”

I hear this argument a lot when wholesalers make a defense of the three-tier system and when self distribution rights are up for debate. What I’ve not hear is exactly how that undue pressure is applied. I’d love a wholesaler to comment and let me know exactly how this happens. Just what kind of leverage does a brewer, selling only his own beer, have over a restaurant or retailer, who themselves have a multitude of options for selling stocking their shelves? Does it work like this: “Now listen up Mr. Retailer, if you don’t buy 25 cases of my beer, I’ll not sell you any more!” To which the retailer I’m sure would reply, “Okey Dokey. See ya.”

But consider the pressure that a beer and wine wholesaler has over that same retailer: “Listen up Mr. Retailer, either you buy those 20 cases of this beer or you’ll find that there may not be anyone come to take your orders for beer or wine and my by account more than a third of your entire inventory, including some of your best sellers are sold by us.”

The other thing that interests me is what exactly the executive director of the North Carolina Wine and Beer Distributors said to the executive director of the Christian Action League when they approached him and requested he reach out to their North Carolina members to oppose any additional self distribution rights for the state’s brewers. And make no mistake, they did indeed reach out to the Christian Action League for these purposes and the article linked to above is what resulted. Did the request go something like this:

“You know, God loves the three-tier system. God wants the three-tier system to be preserved. I know this. I’ve prayed on it. And I know you have too. But if the brewers get enhanced self distribution rights, God’s gonna be pretty pissed cause it’s gonna destroy the three tier system he loves. It’s imperative that we please God. Can you help me please God? Can the God fearing members of the Christian Action League help keep God from getting pissed?

Whatever the wholesalers said to the head of the Christian Action League, it must have been pretty God damned convincing because it lead Christian Action League Executive Director Dr. Mark Creech to make the following plea:

“I am very concerned about this major push that the brewers are planning. It is not of any small consequence. I understand we have some huge issues on the table, the family, the sanctity of life, religious liberty. Such issues may be of greater urgency at times, but our alcohol control regulations are also very serious too.”

God Damned Right!