The reasons for creating a three-tier system of alcohol regulation no longer exist in today’s world.

The three-tier system was developed and implemented in the 1930s following repeal of Prohibition. Its primary purpose was to prevent the return of the Tied House that existed and defined the retail alcohol landscape prior to Prohibiton.

A “tied house” was an establishment (usually a bar or “saloon”) that exclusively sold the products of one producer. This was a result of the producer either owning the saloon or controlling the independent owner of the saloon by virtue of it giving the saloon owner things of value such as inexpensive leases on buildings, fixtures to outfit the saloon, and other items. In exchange, the saloon owner agrees to only sell that producer’s beer or spirits.

The producers or the saloons tied to them used aggressive marketing and sales efforts in order to sell as much booze as possible. Free meals were offered with food. The saloon stayed open at all hours. Prices for drinks were often very cheap. “Two-for-One” drink specials were offered. Moreover, other vices such as prostitution, drugs, and gambling were also carried out inside the saloon. The result was severe damage to lives, families, and communities, and the problems created by the “tied houses” helped convince the community and lawmakers to support Prohibition.

It is important to appreciate also how important the saloon was to local communities. The tied house saloons were prevalent in urban areas. From the end of the 19th century up to the 1920s there was a wave of new immigrants to the United States that primarily settled in urban areas. These immigrants largely had no electricity or air conditioning in their dwellings. There was no television, internet, streaming entertainment, or radio. Transportation was limited to street cars and there was no auto travel or efficient cross-country travel. However, there was the saloon. 

The saloon acted as the “working man’s club”. Folks went to the saloon to get the news of the day, to find out what jobs were available, to organize politically, to eat their meals, and to commune with their people. The saloon, in addition to being a source of alcohol, was also a significant source of community

The culture and society that allowed the tied house “saloon” to flourish prior to Prohibition no longer exists today. No one goes to bars or “saloons” to get their news. No one goes to bars and saloons to find out what jobs are available. No one goes to bars and saloons to organize politically. Few go to bars and saloons to eat their meals. Communing with friends and communities no longer happens in bars, but happens online. 

The three-tier system, with its wholesaler buffer between the producer and the retailer/saloon, was meant to prevent a return to the tied house. However, today’s culture, society, economy, and technology mean that there is no possibility that the “tied house” would become prevalent again with or without a three-tier system in place with its legally mandated wholesaler 

Put another way, the three-tier system is designed to prevent a problem that existed over 100 years ago and that does not and could not exist today.