“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The
lie can be maintained only for such time as the State can shield the
people from the political, economic and/or military consequences of the
lie. It thus becomes vitally important for the State to use all of its
powers to repress dissent, for the truth is the mortal enemy of the
lie, and thus by extension, the truth is the greatest enemy of the
State.”
JOSEPH GOEBBELS, Propaganda Minister Under Adolph Hitler
Collectively, American alcohol wholesalers act very much like Nazi leader Joseph Geobbels and certainly have adopted the strategy of the "Big Lie", described above as a means to deceive the people just long enough to assure that the consequences of the lie take their toll before the mortal enemy of the lie, truth, takes hold.
While the "Big Lie" that most alcohol wholesalers and many state alcohol regulators tell is that the three tier system of alcohol distribution is a great thing, the most important and damaging lies are those little ones that are more often told in support of the wholesaler monopoly.
THE BIG LIES
1. The Three Tier System Prevents Vertical Monopolies in the Alcohol Industry
Whether true or not, it is believed by most that the primary purpose of creating a three tier system at the end of Prohibition was to prevent vertical integration of the industry through cross ownerships between retailer and supplier. It is believed the three tier system was put in place to prevent retailers or restaurants from being "Tied" to large suppliers that could control them by virtue of ownership or influence. Fine. The big lie however is that a state mandated three tier system whereby alcohol must flow through wholesalers before getting to retailers, is necessary to prevent vertical integration or tied house influence. Simply passing a law that prohibits supplier ownership in restaurants and retail establishments would accomplish this. One need not give wholesalers a monopoly to prevent the abuses that allegedly took place prior to Prohibition
2. The Three Tier System Has Resulted In The Best Selection of Products of Any Marketplace in the World
Though the wholesalers claim this, the fact of the matter is that nothing about have a state-mandated three tier system contributes to providing a wide variety of products to consumers. In those markets where in fact consumers are lucky enough to find a variety of wine products that comes close to representing even 1/10th of the wines available in American, the fact that they have this kind of choice has nothing to do with the existence of the three tier system. Rather it has everything to do with the ingenuity of the producers and the retailers' acute awareness of consumer demand. The only reason wholesalers provide the small amount of choice in those markets that might seem to have greater choice of products is because there exists the number of producers to provide a larger choice and a savvy retailer class that demands the ability to meet consumer choice. Wholesalers, given their desires, would see as few brands as possible being distributed in markets. What truly gives consumers in any market real choice and selection is direct shipment rights by out-of-state wineries and retailers. And these rights are EXCEPTIONS to the strict rules of the three tier system.
3. The Tier System Prevents Sale of Alcohol To Minors
Goebbels would be proud of America's alcohol wholesalers for telling this lie. There is nothing about the existence of a state mandate that retailers buy their supply from wholesalers that has anything to do with minors attempting to obtain alcohol or actually obtaining it. Were wineries allowed to sell to wholesalers or directly to retailers as a matter of their own choice, you would see no difference whatsoever in the number of minors that drink alcohol or attempt to obtain alcohol. One has nothing to do with the other.
4. The Three Tier System Prevents Corruption and Coercion the Likes of Which Prompted the Original Adoption of the Three Tier System in the 1930s.
Any retailer or supplier playing in a market that has only 1 or 2 very large wholesalers that control those markets knows this is untrue. In fact, in those many states where two wholesalers dominate the industry, they control access to wine by the retailers and restaurants and they abuse that control through corrupt practices and by the natural corruption that results from monopolies. The wholesalers, in the most corrupt way, demands that retailers and restaurants buy a lot of wines they don't want in order to get the wines they do want. In addition there are many stories of the powerful wholesalers, upon hearing that a restaurant or retailer has begun buying wine from smaller upstart wholesalers, no longer services that account, leaving them without the majority of wines they need to buy. The only way this kind of power could be wielded and this kind of corruption could exist is if use of the wholesale tier was mandated by the state and made into a monopoly.
There are more "Big Lies", but these are among the worst and most often put forward by the proponents of the state-sponsored welfare for alcohol wholesalers known as the state mandated three tier system.
