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Distillery glossary
Three-Tier System
The three-tier system is the U.S. alcohol distribution structure that separates producers, distributors (wholesalers), and retailers into distinct licensed tiers, with most sales required to pass through all three.
Established after Prohibition, the system means a distillery generally sells to a distributor, who sells to retailers, who sell to consumers. Rules vary by state, and direct-to-consumer shipping is a growing exception with its own per-state limits. Managing distributor pricing, depletion, and chargebacks within these tiers is a core part of spirits sales.
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