THREE TIER WOES
AN OLD SYSTEM CONTINUES TO BRING NEW HEADACHES WRITTEN BY SAILOR GUEVARA PHOTOGRAPHY BY AUSTEN DIAMOND
W
ith over 2,000 craft distilleries in the United States, you can expect to find a local distillery pretty much anywhere across this vast country. Still, discovering spirits made in Salt Lake City and the mountains of Utah is surprising considering its history of prohibition. Since Dented Brick Distillery opened its doors in 2016, its intention of offering artisan-made spirits carrying the distinct terroir of Utah’s Wasatch Mountains has provided craft spirits enthusiasts with the unexpected. However, like so many distilleries around the country, the old systems built around the alcohol industry haven't always made it easy. Dented Brick’s owner, Marc Christiansen, built his distillery for capacity, but Christiansen has faced a continued uphill battle with the three-tier system and the beverage distributor system in the U.S. The three-tier system consists of importers or producers, distributors, and retailers. The W W W . ARTISANSPIRITMAG . C O M
system's basic structure makes it so that producers can sell their products only to wholesale distributors, who then sell to retailers, and only retailers may sell to consumers. Some states are considered control states. Utah’s explanation of its system is; “The Utah Department of Alcoholic Beverage Control (UDABC) is an independent state department. It operates a network of state stores and package agencies that sell all alcoholic beverages, except beer containing less than 5% alcohol by volume (ABV and sold in grocery and convenience stores) and maintains wholesale control.” The UDABC has existed since 1935, two years after prohibition was repealed. From 2003 through 2020, the UDABC has contributed about $2 billion to the state. Logic demands that the State of Utah and other such states benefiting from alcohol sales would encourage more alcohol businesses in their state and benefit further from solid
partnerships with in-state alcohol businesses to ensure healthy growth, and safe consumption. Yet alcohol still burdens under the weight of the so-called ‘sin tax.’ A tax referred to because, unlike a general sales tax, the tax is levied in part to discourage the consumption of alcohol and because of potential health costs to the consumer and the general public (such as increased health care costs). Yet, it seems not all sin is created equal. The inequity in the regulations that beer and wine brands enjoy is a deep hardship for liquor brands. Often, beer and wine may sell directly to consumers or bypass certain levels of the three-tier system and often pay less taxes. Alcohol taxes are selective sales taxes on the purchase of alcohol. Most states levy the tax as an amount per unit sold (i.e., per gallon of beer, wine, or liquor). The producer or seller
It seems not all sin is created equal. The inequity in the regulations that beer and wine brands enjoy is a deep hardship for liquor brands. 51