What’s at Stake?

The State-Based Alcohol Regulatory System Works

Because alcohol is different than other consumer products, America’s time-tested regulatory system of alcohol safeguards promotes local decision making about alcohol, strong community protections and near unlimited consumer choice.

Local Decisions Regarding Alcohol Policy

According to the 21st Amendment, “The transportation or importation into every State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.” Simply put, this means states are responsible for control of the sale, distribution and consumption of alcohol. The U.S. Supreme Court affirmed the state’s authority to regulate alcohol so long as it treats in-state and out-of state alcohol producers equally – the CARE Act of 2011 is consistent with that ruling and does not change it.

The people in Georgia, Oklahoma and Utah may not want the same alcohol laws in their community as the people of California, New York or Nevada. The current system of alcohol regulation allows communities and their local public officials to decide how, where and when alcohol is sold, not some foreign corporation, unaccountable Web site or distant federal judge.

The current system enables people who live in a community to make certain that only those businesses that adhere to local standards continue to have the privilege to sell alcohol in that community.  Take a walk down Main Street in your local community and look closely at the alcohol permit applications in store windows or bar walls that ask for public comment; the current system makes this possible. Without the CARE Act and an assurance of local control, a local retailer’s license would have no value because a local license would be a piece of paper inferior to federal control.

Strong Consumer Protection

While many countries have issues with counterfeit and poisonous alcohol entering the marketplace, the American system of state-based alcohol distribution works to prevent tainted alcohol from infiltrating the U.S. system.  Should a quality or counterfeit concern arise for a given product in the U.S., it can be quickly tracked, recalled and pulled from shelves with minimum public exposure.  The same cannot be said of potentially deadly alcohol that is sold outside of a strong regulatory system with localized controls.

Any alcohol sold in a state must come through the current state licensed system, which effectively tracks the chain of custody and ensures that safeguards are in place prevent underage consumption. The current system provides checks and balances among all licensed alcohol producers, distributors and retailers, making it easy to identify bad actors or companies trying to circumvent the system. From supplier to wholesaler to retailer; America’s system of state alcohol regulation is transparent and locally accountable so that communities know who created the product, what the product is and where it is going.

Near Unlimited Consumer Choice

With as many as 50,000 wine labels and 13,000 beer labels, no other consumer product in America offers as much choice – all this despite having strong, commonsense regulations governing distribution and sales.

The current system encourages entrepreneurship and growth. It allowed one popular beer company to go from making beer for family and friends to creating a world-renowned brand, and it is the reason a start-up East Coast beer can be found abundantly on the West Coast.

In countries where there is little or no local alcohol control and beer, wine and liquor is essentially deregulated, consumers have far less choice and variety than in the U.S. In the United Kingdom, for example, alcohol suppliers pay slotting fees – unlike in the U.S. – and there are just a few brands with dominant control over shelf space.

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