Next time you’re at the grocery store, take a minute to study the options. How many brands of soup? Of cereal? Of soda pop?
Then, walk down the alcohol aisles. Beer, wine and spirits of national, regional and local origin abound. Alcohol selections enjoyed by your grandfather, your mother and your friends are easy to find. In fact, Iowa consumers have access to thousands of different labels.
This selection is brought to you by Iowa’s brand of alcohol market regulation, primarily known as the three-tier distribution system and its cornerstone anti-corruption and anti-monopoly component, tied house protection.
A key contributor to the buy-local movement, Iowa’s alcohol policy encourages locally-owned alcohol operations. It’s no accident there are nearly 800 eastern Iowans employed in beer distribution alone.
The law provides protections for each tier – retailers, distributors and manufacturers – from undue influence by any other tier. Distributors buy only what can be reasonably sold and have market-based incentives to merchandise what’s popular. Bars and restaurants that sell only one manufacturer’s soft drinks can offer hundreds of beers, wines and spirits without fear of targeted price hikes or lackluster service.
Tied-house protections also contain exceptions for manufacturers to establish brands with taprooms or cocktail rooms at the manufacturing site to promote their products and provide a consumer experience. The net result is that Iowans are hard-pressed to find a deficiency in choice and availability.
During Iowa’s recent alcohol policy review, we heard from nearly every segment of the industry that Iowa’s laws are generally good for commerce. A chain retailer operating in several states said Iowa’s laws are “retailer-friendly.” Some of Iowa’s biggest liquor suppliers submitted that Iowa is a forward-thinking place to do business while some brewers said aspects of Iowa law are too liberal.