WASHINGTON, D.C., Dec. 11, 2012 — Big corporate beer interests seek to cut out the government-mandated middle man and let all breweries sell directly to consumers. But a prominent liberal group has taken up the cause of the middle man in keeping the market regulated. The New America Foundation in Washington, D.C. is promoting a public forum this week: Big Beer Blitzes America: Is Anheuser-Busch Too Powerful?. Today, a new report by Michelle Minton, CEI fellow in consumer policy studies, illustrates how such “anti-monopoly” advocates are actually hurting competition and consumer choice.
“The current beer distribution system prevalent throughout the nation is known as the three-tier system,” Minton explains. “Its main component is the forced division, by law, between those who make alcohol, those who ship it, and those who sell it.”
This system forces brewers to contract with distributors, who sell to bars, restaurants, and stores. Instead, Minton argues, brewers should be permitted to sell directly to consumers.
“This kind of freedom and flexibility will allow beer producers to respond to market conditions,” Minton writes. “In the end, more freedom will make it easier for small brewers to start up and stay in business, resulting in better beer choices for consumers.”
>> Read Michelle Minton’s CEI OnPoint: “Avoid a Beer Monopoly By Setting the Market Free: How a Mandatory Three-Tier Distribution System Inhibits Competition“