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Prohibition & The Three Tier System

Week 2 Lecture

peter andrews

on 28 February 2014

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Transcript of Prohibition & The Three Tier System

18th Amendment
Prohibited the manufacture, sale, or
transportation of intoxicating liquors
Temperance Movement
Led by Anti-Saloon League-Protestants
21st Amendment

The Three
Tier System
Tier 1
Tier 2
Tier 3
Benefits of Three Tier System
Systematically collect excise taxes on alcohol at wholesale level.
Federal & State Governments
Federal, State, & Local Laws
Federal Agencies
The Bureau of Alcohol, Tobacco, & Firearms
Three Layers of State Control
These are the 18 states that monopolize the distribution & sale of alcohol.
State Control Liability Law
Dram Shop Laws
Municipal Control
Enforcement of Alcohol Regulations and Laws
Prohibition Clip
Federal Agencies
Three Main Responsibilities
Brilliant Idea!
Volstead Act- January 1920
Never illegal to consume alcohol
1820's-Religious Revivalism
1846-Maine first state to pass law
1861-Civil War
Mainly women
Factories followed suit
Suffrage 1913-1920 first year to vote
Radical Enforcers
1917-mobilization of WWI
Need 36 states to become Ratified.
Timeline of Repeal
Dec 6, 1932
December 5, 1933
February 21, 1933
Sen. Blaine of Wisconsin Submits Letter to congress for submission of 21st Amendment
Annuls 18th
Newly-elected President Roosevelt ask Congress to modify Volstead Act
Amendment was sent to state governors.
Allowed sale of 3.2% ABV Beers
30,000 people vs. 20 blocks of full beer trucks in St. Louis- AB
36th State ratified the Amendment
President Roosevelt Signed the proclamation ending prohibition
Frequently have a direct relationship with the manufacturers they represent. Typically have buying power.
Generally buy a large quantity of products directly from the distributors.
On Premise
Large Buys
Drunk in or"on" premise purchased
Drunk away or "off" premises of purchase
Tax Collection
Level Playing Field
Offsite Warehousing
Controls all phases of consumption. Hours, Age, BAC Content, DUI Laws.
Theoretically, it allows small producers EQUAL access to customers via a distribution system that otherwise could not be afforded.
Distributors carry large inventory of wide variety of products. Offers greater economy for shipping and receiving larger quantities.
Federal Laws-
State Laws-
Local (Municipal) Laws-
ONLY govern licensure of producers and general labeling requirements.
No federal laws regarding drinking age
License alcohol distributors (Non-Control) and determine maximum number & types of licensees for retail. Based upon Population.
Most detailed and appointed. Each level has its own agency or body of government whom enforce these laws. Many dry towns left in U.S.A.
Was once part of the IRS
Two main areas of jurisdiction
Consumer Protection
Ensuring that each alcoholic beverage conforms to the standards of identity.
Trade Practices
Preventing the sale of illegal alcohol, and enforcing laws related to alcohol, tobacco, firearms, and explosives.
The Alcohol & Tobacco Tax & Trade Bureau
Formed in 2002 as part of US Treasury Dept.
Revenue Collection in form of taxes
Producers based on ABV
Customs Duties & Taxes on imported alcoholic beverages
Federal Taxes on Alcohol Sales
Label Approval
Issuing of COLA or Certificate of Label Approvals
Licensing of Producers, Importers, & Distributors
Sometimes issues a limited amount of licenses and collect fees from those allocated to sell alc. beverages. Privately owned retail.
Retail workers can be charged for over-serving, or serving underage. Responsible for accidents
Licenses can get revoked/jail time.
Third Party Liability. Protects the innocent third party injured.
Liability Laws
In states without Dram Shop Laws, there are NO caps on punitive damages
Caps on Punitive Damages
"Reasonable Efforts" in prevention of alcohol-related incidents is essential
Alcoholic Beverage Commission (ABC)
Liquor Control Commission (LCC)
Final say on whom receives licenses and hours of operation.
Liquor Authority Regulates sale of alcohol by
Monitoring the actions of liquor license holders
Issuing citations for violators
Holding hearings for violators
**Hold Stings Regularly**
Prohibition 18th, 21st Amendment
Tier One- Producers, Importers Brokers
Tier Two-Distributors & Wholesalers
Tier Three-On & Off Premise Retailers
ATF- Consumer Protection, Trade Services
TTB-Revenue Collection, Label Approval, Licensing
Dram Shop Laws- Third Party Liable
Municipal Control- Monitor licenses, Issue Citations, Hold Hearings
DUI Arrests
1)California (214,828)
2)Texas (90,066)
3)Florida (61,852)
Pennsylvania (53,319)
5)North Carolina (49,599)
6)Wisconsin (40,549)
7)Arizona (39,746)
8)Washington (34,952)
9)Missouri (34,044)
10)Minnesota (29,832)
50)Delaware (215)
Full transcript