Facts, Figures, and What They Are Saying
The Three-Tier System by the Numbers
- The global craft spirits market is projected to grow by $36.82 billion and grow at a rate of nearly 23 percent from 2021-2025.
- In 2020, the U.S. craft spirits market share of total U.S. spirits reached 4.7 percent in volume, up from 2.2% in 2015, and reached 7.1% in value, up from 3% in 2015 (ACSA).
- The global wine market is projected to reach $434.6 billion by 2027, growing at an annual rate of 4.2%.
- The craft beer market size is expected to accelerate at a rate of 11.24 percent from 2021 to 2025 – nearly double the growth rate of the global beer market, which is set to grow at a rate of nearly 6 percent from 2020 to 2026.
- The alcohol industry is expected to have a compound annual growth rate (CAGR) of 7.45 percent from 2022 to 2025.
- In 1978, there were only 89 breweries in the United States. As of 2020, there over 8,800 breweries operating in the U.S.
- The number of craft distilleries has grown 10.7 percent between 2019 and 2020.
- Alcoholic beverage prices have been rising more slowly than the consumer price index, showing that competition and choice in the alcoholic beverage industry are delivering benefits to consumers. Between May 2021 and May 2022, the consumer price index for all items increased 8.6%. However, Americans were only paying 2.7% more for alcoholic beverages at home in May 2022 compared to May 2021.
- The alcohol industry is responsible for 1.65 percent of the U.S. economy.
- The direct impact of the alcohol industry is more than $122.63 billion annually.
- The U.S. alcohol industry generates almost $70 billion in annual tax revenue.
- Today, the total economic impact of America’s alcohol industry is valued at $363.33 billion annually.
- Under the Three-Tier System, the alcoholic industry supports millions of jobs in production, distribution, and retail. The beer industry alone supports 2 million jobs, including in agriculture, manufacturing, distribution, importation, and retail.
- In 2019, the number of workers in the American craft spirits industry increased by over 5,000 to a total of over 30,000 people employed.
- The amount of workers employed in the American wine industry increased an average of 1.2 percent in the five years between 2016 and 2021.
- There are 57,000 workers employed at wineries and 3,500 workers employed at whiskey and bourbon distilleries in the U.S.
- The United Food Commercial Workers International Union (UFCW) represents 5,000 workers employed in the U.S. wine and spirits industry.
What They Are Saying About Competition
“Our unique alcohol system helped create the most dynamic alcohol marketplace in the world. There are more brands from more companies and countries on more retail shelves than in any other country. Even though some brands are much more popular than others, no handful of brands dominate the alcohol market. Instead, the U.S. leads in innovative new alcohol brands, and entrepreneurs are drawn to this industry consistently every year. Moreover, there are few regulatory barriers to becoming an alcohol producer, wholesaler, or retailer. While improvements can be made, it is hard to point to another food or beverage category that enjoys the diversity of companies, products (both new and existing), and brands that we have in alcohol.”Wine & Spirits Wholesalers of America
“Under the existing regulatory structure, Louisiana has witnessed an incredible increase of competition in all tiers of the beverage alcohol industry over the past 20 years. In just the last 10 years, TTB brewery permits have increased in Louisiana from 12 in 2011 to 68 active permits in 2021. Coupled with the growth in the number of brewers, we have seen the number of brands available to consumers double. In addition, within the last 5 years, Louisiana has several new wholesalers operating in the state that offer even more access to market for suppliers. Small craft suppliers occupy over 50% of taps in on-premises accounts and over 18% of shelf space in grocery stores in our state. The trade practices that regulate the alcohol industry offer suppliers more access to market than any other industry.”Beer Industry League of Louisiana
“The resulting regulatory structure uniquely guards against anticompetitive forces that may exist in other industries. Our dynamic, diverse, competitive and inclusive Three-Tier System strikes a healthy balance among societal, governmental and commercial needs. BevAlc products are a special category of consumer goods and are regulated for good reason. We caution the Federal Government on deregulating the industry and increasing the risk for a return of tied-house and consumption abuse.”Southern Glazer’s Wine and Spirits
“The American alcohol regulatory system and market stands as a shining example of how effective regulation can appropriately balance competition with control and achieve the dual public policy goals of open and orderly markets and temperate consumption of intoxicating beverages.”Wholesaler Beer Association Executives
“The positive, high-growth environment we have in North Carolina has attracted several of the nation’s largest craft brewers to establish East Coast operations in our state. Our regulatory structure is favorable in that it provides reasonable access to new entrants while allowing established companies the opportunity to flourish. This is a clear indication of just how open and competitive the N.C. beer and wine business is today. We have a system in place that is safe, transparent, well-regulated and efficiently taxed. Consumers in North Carolina, and the rest of the U.S., are well-served by a regulated three-tier system.”North Carolina Beer & Wine Wholesalers Association
“New Futures implores the TTB to maintain existing alcohol regulations. Any reduction in regulations that protect the public’s health threatens to compound increases in alcohol-related harms associated with the COVID-19 pandemic.”New Futures
“Our current beverage alcohol regulatory system in this country has a proven record at maintaining a level playing field for business, providing crucial product ‘line of sight’ throughout the supply chain and promotes the public’s health and safety.”National Alcohol Beverage Control Association
“The strength of state alcohol regulation is key to a safe and viable system of alcohol control and distribution. Serving in numerous roles and performing an array of tasks, distributors serve as a critical link in an efficient system that allows smaller, more unique products access to market, provides consumers with the choice they desire at a great value and ensures a safe and orderly marketplace. The independence of tiers prevents the formation of vertical monopolies and corrupt sales practices in the industry. It is the greatest antitrust law ever written. Preservation of an orderly market by the various states has already protected the vibrancy of the American markets for beer, wine, and spirits, and improved market access for smaller, independent, and new operations.”Kansas Wine & Spirits Wholesalers Association
“We must recognize that beer and related products contain alcohol. They are consumable by the public and must be done so with appropriate regulatory oversight. Without such, serious risk of harm to individuals, families and public health and safety can and did result during the prohibition era. It is recognition of this very fact which has led to the validity of the three-tier system of regulation in America. It is what has protected our public from such things as counterfeit products reaching the marketplace, the deployment of monopolistic practices, and contaminated product. Additionally, the system of state regulation also aids in the accountability for excise tax revenues benefitting the federal and state government attached. … The middle tier of the three-tier system, the distributor, assures that suppliers get their product to market, and retailers receive the product their patrons want to consume. Without the middle tier, state government regulators, to whom power has been conferred by the U.S. Constitution, would be without an important element in the ability to hold the entire system accountable for product to be distributed without discrimination but with accountability for product distributed and the various taxes attendant to the same. Without the three-tier system and the counterbalancing roles it provides, the door opens rather widely to the prospect of monopolistic practices in which the big get bigger and the small become a faint memory. The system works.”West Virginia Beer Wholesalers Association
“At the federal level, the Federal Alcohol Act as administered by the TBB ensures the greatest possible consumer choice by making sure startup and smaller brewers have access to market. As is appropriate for all laws, striking the proper balance is critical. The trade practice regulations developed and refined over decades since the country realized the folly of alcohol prohibition allow innovation while preventing predatory practices that would keep new suppliers from the market.”Pennsylvania Beer Alliance
“Preventing and eliminating anti-competitive behavior is a noble and worthwhile endeavor. States like Michigan have succeeded in this endeavor for decades. No other regulatory model has ever achieved the level of success in delivering competition, choice, and value to consumers as the model used to regulate the alcoholic beverage industry. In short, the current regulation of the alcoholic beverage market is the benchmark by which all other systems should be judged!”Michigan Beer & Wine Wholesalers Association
“There are more beers available to the American consumer today than there are in any other country in the world. That is due, in large part, to the American three-tier system, and the efforts of beer distributors in particular, who have facilitated increased market access and the scale of distribution for craft or other small brewers. The presence of a statutorily designated distribution tier allows smaller suppliers broad access to the marketplace without the cost of establishing, financing, and maintaining a comprehensive distribution and brand building infrastructure.”California Beer & Beverage Distributors
“From the outset, it is safe to say that there is much more right than wrong with the American ‘three tier system’ of alcohol production, distribution, and sales. The fact is that alcohol industry innovation and growth have been phenomenal for the past two decades. It is never too late to better understand and appreciate our current alcohol ecosystem for the success story that it is, and limit changes to the current system to consensus-driven solutions, instead of imperiling its long-term health and the value it ultimately provides to business owners, workers, and consumers. Equal enforcement of current laws and regulations, while making sure that all beverage alcohol retailers have access to all products at fair prices and without conditions, will continue to serve competition and American consumers well.”American Beverage Licensees