Three-tier system (alcohol distribution)

In Washington, retailers may purchase alcoholic beverages directly from producers, may negotiate volume discounts, and may warehouse their inventory themselves.

Both of these concerns led to the states individually creating environments in which single ownership of all three tiers (production, distribution and retail) was entirely or partly prohibited.

States have various exceptions to this rule, the most prevalent one being the case of a brewpub, which is simultaneously a producer and retailer, and has no requirement to sell to a distributor.

Another example is that a beer distributor might be responsible for setting up and maintaining draft lines in a restaurant, or may be legally prohibited from doing so, depending on the state.

[7] In Washington, retailers may bypass distributors by purchasing directly from producers, may negotiate volume discounts, and may warehouse their inventory themselves.

[8] Although private retailing should increase competition in principle, in many cases producers have entered into exclusive marketing agreements with distributors for the market region, to the extent that each brand is often only available from a single distributor in the state (although large retailers such as Costco have been able to take some advantage of the law and in some cases have introduced their own house brands).

[3] Contrary to the fears of some in the political process, the number of drunk-driving arrests and alcohol-related motor vehicle accidents actually dropped in the year after the conversion to the new system.

Following the passage of a voter referendum in 2016, the broker and distributor levels were effectively merged effective on October 1, 2018, resulting in the three-tier system common to the rest of the U.S.[9] Wine and Spirits Wholesalers of America (WSWA), an influential trade organization and lobby group based in Washington, D.C.[10] that works to oppose initiatives to alter the three-tier model, contends that wholesalers not only sell alcohol but also perform state functions and are in the business of encouraging social responsibility concerning alcohol.

[14] In June 2017, tobacco wholesalers proposed that the three-tier system also be imposed for recreational marijuana in Massachusetts.