The strength of this state-based alcohol regulation is key to a safe and viable system of alcohol control. A one-size fits all approach to alcohol regulation simply does not work. The state-based regulatory system allows each state the flexibility to deal with issues unique to their state, taking into account different cultural attitudes about alcohol. As society addresses problems such as underage drinking and drunk driving, the importance of maintaining effective state-based alcohol regulation is critical as this approach enables policy-makers to direct their resources and adopt solutions best suited for their particular circumstances and needs.

While state laws and regulations differ, they share a common basic framework known as the three-tier system of beer distribution. The three tiers include suppliers, distributors and retailers. Brewers and beer importers sell their products to beer distributors who hold federal permits and state licenses. Distributors then provide a mix of brands and meet the inventory needs of retailers that hold appropriate state licenses to sell beer to consumers of legal drinking age.

This three-tier distribution system provides a balance between necessary regulations and a competitive marketplace by providing a clear and documented chain of custody in the sale of beer that makes it possible to enforce state laws and local ordinances.

This state-based system ensures accountability, promotes orderly markets and temperance and provides for industry integrity through background checks and ongoing monitoring of those responsible for beer distribution and retail sales to consumers. Beer distributors aid local and state governments in efficient tax collection by keeping comprehensive records of the amount of beer they sell in each locality.

The American beer distribution system fosters a level playing field in the marketplace for all brewers, retailers and consumers. The system provides thousands of beer brands - from multinational beers to the smallest local microbrews – access to market. It levels the playing field between large chain retailers and small independent retailers, ensuring a wide selection of quality products from which consumers may choose.

In 2006, the beer industry joined forces with regulators, legislators and public health organizations to support the Sober Truth on Preventing Underage Drinking (STOP) Act, which Congress passed and President Bush signed into law on December 20, 2006 (PL#109-422). This meaningful legislation emphasizes the primary responsibility of the states to regulate alcohol as afforded them by the 21st Amendment. The law also addresses the health and safety issues involved with underage drinking through effective public and private sector programs, and it authorizes grants to support innovative state efforts. STOP Act Provisions:

• Permanently establishes the federal Interagency Coordinating Committee on the Prevention of Underage Drinking (ICCPUD).
• Authorizes a national media campaign, new grant programs and research to combat underage drinking.
• Recognizes alcohol’s unique attributes including its status as an age-restricted product.

• Alcohol is a unique product and should be regulated differently than other products by the states and federal government.
• States have primary authority to regulate alcohol distribution and sale, and the federal government should support and supplement these state efforts.
• States have a responsibility to fight youth access to alcohol and reduce underage drinking.
• Continued state regulation and licensing of the manufacture, importation, sale, distribution, transportation and storage of alcohol beverages are clearly in the public interest and are critical to promoting responsible consumption; preventing illegal access to alcohol by persons under 21 years of age from commercial and non-commercial sources; maintaining industry integrity and an orderly marketplace; and furthering effective state tax collection.

Beer Industry Efforts to Promote Responsibility

America’s brewers, importers and distributors are proud to be leaders in providing information to the public to encourage responsible alcohol consumption among adults of legal drinking age. The industry sponsors various programs at professional sporting events and party planning guides that include best practices for safe celebrating. The beer industry also sponsors training in several languages for servers and sellers of alcohol to teach them how to properly check ID’s and understand the effects of alcohol. Training programs also teach servers how to effectively intervene to prevent potential alcohol abuse situations. The beer industry works to reduce youth access to alcohol by supporting tough state laws for the manufacture or use of fake ID’s and by providing retail signage and public service messages in national, regional and local media reminding parents and other adults not to purchase alcohol for minors or provide it to them. The industry also opposes the sale of alcohol products outside the state-based regulatory structure.

While work to pass the historic STOP Underage Drinking legislation is complete, the efforts to properly implement the directives of the law are just beginning. Can we count on you to work to ensure that the STOP Act is fully implemented and funded?

 Download the pdf version

Beer Serves America

The beer industry is a dynamic part of the manufacturing, agricultural, retail and service sectors of the U.S. economy. According to a new industry analysis by the Beer Institute and NBWA, the beer industry contributes nearly $190 billion – or 1.4 percent of the entire nation’s GDP – to the American economy. That contribution is comprised of billions of dollars in wages and taxes paid by brewers, importers, distributors and retailers; it also includes the impact of beer industry suppliers.

Suppliers to the beer industry produce and sell a broad range of items including ingredients for brewing processes, fuel, packaging materials, sales displays and machinery. The production of beer is very important for our nation’s farmers. The study showed over four billion dollars in economic contributions for the agricultural sector, including malting barley ($537.8 million), hops ($280.7 million), brewers rice ($222.9 million) and brewers corn ($58.4 million).

The beer industry pays over $36 billion dollars in taxes annually to federal, state and local governments. Business and personal taxes paid by industry members come to almost $25 billion annually. In addition, consumption taxes total over $11 billion dollars and include federal excise tax collections of $3.6 billion, state excise taxes of $1.6 billion, as well as sales and other consumption taxes of $6.2 billion.

Beer Employs America

Brewers, importers, distributors and retailers directly or indirectly employ over 1.7 million Americans. The industry paid almost $55 billion in wages and benefits in 2006. The beer industry remains a leading contributor of manufacturing jobs in the United States. Those employed by the beer industry are well-compensated; the U.S. Department of Labor finds their wages to be among the highest of 350 industries surveyed. According to the U.S. Census Bureau, the average manufacturing wage in the beer industry is one-third higher than the national average, and the benefits paid to those workers are more than two times the national average.

The beer industry directly employs over 900,000 Americans, paying them more than $25 billion in wages. Large and small brewers and beer importers employ 47,000 people, and the nation’s 2,750 beer distributors employ approximately 91,000 individuals across the country. Beer is a key driver of the profitability of more than 531,000 licensed retailers supporting over 800,000 jobs in supermarkets, convenience stores, restaurants, bars, stadiums and other outlets.

Download the pdf version

In 1991, federal excise taxes on beer and a host of other so-called "luxury" goods were raised to help balance the federal budget. The beer excise tax was doubled from $9 to $18 per barrel. Since then, Congress recognized the tremendous economic harm caused by these tax increases and rolled back the taxes on luxury items such as furs, yachts and private jets. The higher tax on beer remains and disproportionately falls upon lower and middle income Americans.

The economic effects of the beer tax hike are devastating. Approximately 60,000 Americans lost their jobs in brewing, distributing, retailing and related businesses after the tax increase. The tax increase caused the loss of over $8.6 billion in domestic economic activity.

While many sectors of the economy have seen their manufacturing operations move overseas, 86% of the beer consumed in America is manufactured in the United States. The beer industry is a major contributor to the domestic farm economy as the largest purchaser of rice, barley and hops in the country. These raw agricultural goods are produced in dozens of states, supporting hundreds of local economies as well. High-quality, well-paying beer manufacturing jobs are spread out at breweries around the nation. Their products are shipped by a vast network of distributors to retailers helping keep America’s economy strong and vibrant. The beer industry supports a reduction in the federal excise tax rate for America’s brewers and importers.

A few vocal interest groups are still calling for further increases on alcohol beverage taxes. Economic research indicates that alcohol taxes are not an effective policy tool for combating illegal underage drinking or abusive alcohol consumption. A meticulous econometric analysis of the U.S. government’s Monitoring the Future survey from 1977-1992 found that beer taxes had no statistical relationship to "moderate" or "binge" drinking rates. On the other hand, effective policy alternatives focusing on preventing youth access to alcohol, strengthening state-based regulation and law enforcement and engaging parents, teachers and other community leaders are available and have been successful in controlling underage access and reducing abuse. Since 1998, all measures of teen alcohol use have declined significantly according to the Partnership for a Drug Free America (2005).