Beverage alcohol is a unique product, and it is important to "know what's in that bottle." Thanks to the middle tier, those companies licensed to distribute are importers of record who provide for inspection, traceability and the ability for recall of substandard product. Public safety demands a system that works to protect consumers from inferior and dangerous beverage alcohol products.
Consumer Choice, Fair Competition and Product Affordability
Because distributors buy a wide variety of products in large quantities, consumers are afforded choices of products at reasonable prices that simply would not exist if individual retailers were forced to take shipments directly – absorbing higher costs for lower volume as well as high shipping rates.
The exception may be "big box" stores that buy in larger quantities, but the untenable trade-off is that those retailers often tend to carry a very limited variety, ignoring specialty brands that do not move off the shelves in voluminous quantities.
This also highlights the notion of fair competition. Distributors that provide for variety at reasonable cost allow producers (in the first tier) to get their products to the consumers who want to enjoy them and give smaller specialty retailers (in the third tier) the opportunities to compete.
Economic Vitality and Stability
Because distributors deliver choice, affordability and competition, they provide an enormous amount of economic vitality and stability across Arizona. They give both smaller producers and retailers a chance to succeed in the marketplace. The competition that is fostered is an significant boon to the overall economic health in the industry and generally.
Just as important are the jobs and economic stimulation the distributors' businesses create within the communities they serve. They also provide advertising dollars which are the lifeblood for many other businesses in the area.
This benefit created by the second tier in the three-tier system is really a byproduct of what has already been mentioned. Without the opportunities for success provided by distributors, the smaller neighborhood family-run stores would disappear. Consumers would not be able to "run down to the corner" to quickly get what they want. Communities would also lose the uniqueness and sense of place these local stores provide.
In recognition that beverage alcohol products are unique in the marketplace, and in consideration for the great number of tangible safeguards and benefits provided by distributors, it is clear that the merits of Arizona's three-tier system should be applauded and its framework kept intact.
For more, please read: Everybody Wins: How an Independent Alcohol Distribution System Works So Well for So Many