Distribution

Beer Distribution in VA

If you missed my introductory post last week, check it out for some basic information on beer distribution in the U.S. As I mentioned in that post, laws can vary widely between states as a result of the 21st Amendment. While Virginia's three-tier system is somewhat standard, breweries have a few ways to sell beer without using a wholesaler. Like most states, brewpubs (where the producer is also the retailer) are allowable in Virginia. Since the passage of Senate Bill 604 in 2012, craft breweries in Virginia have also had the right to sell products from a taproom for both on-premise and off-premise consumption. 

Virginia craft breweries are not totally limited to contracting with a wholesaler when it comes to selling beer to a retailer...

Beer Distribution - A Primer

The most frequently asked question we receive when discussing our brewery (outside of, "When will be able to drink you beer?!?") is about how we will distribute our products. If the interested party is expecting a short, simple answer, they are pretty much out of luck! Distribution is one of the most complicated topics for craft breweries, but also one of the most important decisions that will be made during the startup phase.

Beer distribution in the U.S. generally occurs through what is known as the three-tier system. Setup after the repeal of Prohibition, the three-tier system includes producers, wholesalers, and retailers. The structure can vary widely from state to state as a result of the 21st Amendment allowing each individual state to regulate alcohol as they see fit. In general, the system mandates that breweries can only sell to wholesalers, wholesalers can only sell to retailers, and retailers are the only tier that can sell to consumers. 

The introduction of the system was initially meant to decrease the possibility of monopolies...