The United States is the most profitable market for beer, wine and spirits producers in the world. But it is fragmented and covered by a maze of regulations that vary state by state. President Joe Biden could be about to change all that, so states an article in The Drinks Business.
At the end of Prohibition, Congress enacted legislation that among many things, prevented vertical integration of the industry. The 21st Amendment and legislation that followed was intended to moderate over consumption of alcohol. For instance, an alcohol beverage producer is prevented from owning licenses in the distribution and retail segments of the business in most states.
Over the years, many industry players have tried to chip away at these tied-house provisions. And a growing number of both state and federal legislators have backed these attempts, unable to rationalize tied house laws in today’s modern marketplace.
In July, President Biden signed an executive order requiring the Treasury Secretary, Attorney General and the Federal Trade Commission to assess threats to competition and barriers to entry across a range of industries. His targets were mostly technology, telecoms and pharmaceutical groups but also included was an instruction to review the beer, wine and spirits sectors.
The Biden executive order instructs the Washington agencies to report to the President with 120 days of being issued on July 9. Will the current administration upend alcohol regulation in the U.S? Or will this political “hot potato” be too disruptive and controversial for legislators to handle? There are varying opinions among industry observers, but the likely outcome may be somewhere in the middle.
See the Drinks Business article here.