The Alcohol Distribution System

With passage of the 21st Amendment in 1933, ending the 16-year-long Prohibition era, Indiana and other U.S. states needed a system to effectively regulate the alcohol market. Indiana, like most states, chose a three-tier distribution system that requires alcohol products to be transported from manufacturer to licensed distributor to licensed retailer. This system continues to effectively serve Indiana’s alcohol market with a number of significant benefits: consumer choice, transparency and accountability, product integrity, reduced access to minors, and positive economic impact. Other states are referred to as control states because they choose to operate as their own distributors, or as the second tier in the system. Indiana’s alcohol distributors serve as the state’s partner in tax collections and retail law enforcement.