In the wake of the pandemic Illinois breweries were granted a lifeline last March when the state instituted temporary legislation allowing them to deliver their beers directly to homes.
And now new legislation hopes to make alcohol home delivery permanent, as well as allow breweries to use third-party services such as Uber Eats or DoorDash to get their beers directly to consumers.
This new legislation strikes at the very heart of the three-tier system. And that’s why we suspect that this current bill, which was drafted by the Illinois Craft Brewers Guild and sponsored by Democratic Sen. Bill Cunningham of Chicago and Democratic Rep. Will Davis of Homewood, Illinois, will never become law at least in its current form.
Before prohibition, beer and spirit producers controlled their own distribution. But after that unfortunate law ended in 1933, states looked to implement a system that regulated the manufacture and distribution of alcohol is such a way to discourage large breweries from monopolizing the industry, and ensure that products were being made and transported safely.
And what has become known as the three-tier system was born, and that arrangement continues to define how alcohol is delivered in almost every state today.
As Josh Noel explains “That system ensures that most beer touches three businesses between brewing and consumption: a brewery (the first tier), a distributor (the second tier) and a retailer (whether a store, bar, restaurant or venue, which is the third tier).”
But in an effort to help small businesses weather the severe economic impact of COVID-19, many states, like Illinois, implemented measures to get around that existing structure allowing small breweries to forego that second tier and deliver their beers directly to home doorsteps without going through (and paying for) a distributor.
And that means more profits for the breweries and less for distributors who rely on the enforcement of the three-tier process to exist.
Which is why we don’t expect the bill to survive the well-funded opposition of Illinois’ distribution lobbyists…who tend to carry considerable political sway with legislators.
Alleging that the new bill would “destroy the three-tier system as it is in law now,” Bob Myers, president of the Associated Beer Distributors of Illinois, a trade group that represents the state’s beer distributors, told the Chicago Tribune that “his organization will likely oppose the legislation.”
“I will be happy to sit down with them and discuss their needs and wants, but we have to determine is this need or is it greed and go from there,” Myers added.
But Danielle D’Alessandro, executive director of the Illinois Craft Brewers Guild, argues that allowing breweries to sell directly to consumers post-pandemic is “a natural evolution of consumer preferences,” in a post-pandemic world.