Take a look at the bottle of wine/beer/spirits in your hand. How did it get there? Well, after it was produced, the producer sold it to a distributor at less than 50% of its retail price, who then sold it to a store at a large profit, who then sold it to you at a markup 18-25% higher than its intended retail price. There may have been a broker in there as well. Why so many middle men, and why so complicated? Prohibition and the three-tier system. Prior to prohibition, the alcohol industry was very loosely regulated, and dominated by a few very large producers. Anti-competition practices abounded: if a brewery or distillery didn’t have its own bar, it ‘invested’ in bars by giving loans or furniture and, in exchange, demanded that no other brands be sold on the premises. These big, bad breweries also required increasing sales, so the [...]










