The Three Tier System, or How Alcohol Distribution Works

Since the repeal of the 21st Amendment to the Constitution (Prohibition) each state was given the right to control the importation, distribution and use of alcoholic beverages within its borders. In Arkansas and other states, the three tier distribution system ensures alcohol is distributed and consumed safely.

Moon Distributors and Central Distributors, jointly owned and together make up Arkansas' oldest continuously operating alcohol distributor. Wholesalers represent tier 2 in the "Three Tier System" business model used by the alcohol industry in the U.S.

The other two tiers are simple. Tier 1 is represented by distillers, importers, vinters and brewers also known as suppliers. Tier 3 is represented by licensed retailers, which are also known as the on and off premise. The Wholesale tier, tier 2, buys from tier 1 and sells to tier 3. This is all in an effort to offer the best variety of products to the consumer in Arkansas.

Through Moon and Central, we carry more than 7,000 active products. More than half of them are less than 10 years old — we pride ourselves on seeking out new products and paying attention to industry and consumer trends. Moon and Central introduce about 500 new products each year to our customers.

The three tier system promotes a safe marketplace and environment for Arkansas by limiting the authorized channels through which alcohol enters our state and mandating responsible delivery and marketing to those who sell it. The system also helps ensure that minors are not given access to alcohol and that the state can collect taxes on alcohol sales. The system also creates a level playing field for retailers of all sizes, increasing competition and supporting small businesses.

All three tiers of the wine and spirits industry are subject to state regulations in each state where they operate. Although the laws vary from state to state for the 3 tier system they all share many of the same common goals. The system allows each state to efficiently collect taxes, it prevents the sale of alcohol to minors, it fosters and oversees responsible competition in a regulated environment, it ensures product safety and it prevents the sale of counterfeit alcohol products.

Want to know more? Contact us. Or better yet, learn more about Arkansas liquor laws by visiting the website for the state's Alcohol Beverage Control unit.