Three-Tier System

What is the Three-Tier System?

Following the repeal of Prohibition on December 5, 1933, Congress enacted the Federal Alcohol Administration Act (FAA Act). This act led to states adopting various laws that created a “Three-Tier System” for the production, distribution and sale of alcohol. ABL is committed to preserving the integrity of the state-based alcohol control system that has evolved under the 21st Amendment.


An Efficient & Effective Means of Assuring Responsible Commerce and Economic Success

The Three-Tier System is a pro-competitive and economic mechanism for the orderly marketing, taxation and sale of alcohol beverages. Billions of dollars of applicable state and local excise taxes have been collected under the Three-Tier System over the past eighty years. In 2016, the beverage alcohol industry was responsible for $25.3 billion in federal taxes and an additional $18.36 billion in state and local taxes.


Promoting Responsibility and Accountability

ABL is dedicated to the responsible sale and service of alcohol beverages to adult customers. The Three-Tier System strengthens the beverage alcohol industry’s ability to account for its products, responsibly provide them to consumers, and prevent access of alcohol to those who are underage or should otherwise not be served or sold beverage alcohol.


“Unquestionably Legitimate” System Offers Unparalleled Consumer Options

In 2005, the Supreme Court confirmed that the Three-Tier System is ‘unquestionably legitimate’. The Court’s language reaffirms the right of states to regulate the beverage alcohol marketplace that currently offers an unparalleled and never-before-seen selection of beer, wine and spirits to adult consumers.