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Three Tier system and Pricing overview for USA Market

21/11/2013

At all levels mark up is added. Learn on how you need to price your wine and spirits brands before you pitch your brands to a prospective importer?

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The three-tier system of alcohol distribution is the system for distributing alcoholic beverages set up in the United States after the repeal of Prohibition. The three tiers are producers, distributors, and retailers. The basic structure of the system is that producers can sell their products only to wholesale distributors who then sell to retailers, and only retailers may sell to consumers. Producers include brewers, wine makers, distillers and importers

At all levels mark up is added. But the good news is import taxes are much lower than many parts of the world and thus you see US as one of the biggest wine markets in the world.

The American three-tier distribution system is governed by the 21st Amendment of the United States Constitution. When the U.S. Congress first passed this law in 1933, this historic Constitutional Amendment overturned the infamous 18th Amendment to the U.S. Constitution, passed 14 years before in 1919.

Three Tier System USA Drinks Market

At the state level, two legal approaches are taken. 32 states allow the private sector to distribute and sell alcoholic beverages, including such states as California, New York and Florida, among others via the three-tier wine distribution system. Elsewhere, 18 states have decided to adopt a so-called control distribution model, under which the state is involved in one or more tiers of the traditional three-tier distribution system noted earlier.

 

Lets look at how the pricing works?

Wine Category

Lets assume our goal is to get to $9.99 retail (USD). For that we are assuming that the price at the winery is $30 USD per case for a 12 packs of 750ml.

USA Market Wine Pricing

 

Spirits Category

Lets assume our goal is to get to $30 retail (USD). For that we are assuming that the price at the distillery is $60 USD per case for a 12 packs of 750ml.

USA Market Spirits Pricing

COVID 19: What Wineries and Distilleries Can Do In Next 60 Days, hosted by Sid Patel, CEO of Beverage Trade Network, a leading USA based drinks media platform which organizers more than 16 events around the world and owns media assets and platforms will be giving a detailed action plan webinar on how wineries and distilleries can ride this wave.

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