Three-tier cheers! States are calling the shots when it comes to regulating alcohol producers, distributors and retailers.

• Author: Morton, Heather
• Position: ALCOHOL REGULATION

Last year was a busy one for U.S. alcohol makers. Wineries bottled 719 million gallons. Breweries produced 192 million barrels of beer. And distilleries bottled 405 million gallons of whisky, vodka, rum and other alcohol, according to the U.S. Treasury's Alcohol and Tobacco Tax and Trade Bureau.

And as the alcohol production business expands, so does the related tourism industry. At breweries, wineries and distilleries across the country, millions of visitors are comparing flowery bouquets, discovering hints of smoky aromas and spending money on locally produced spirits like never before.

As a result of all that brewing, aging, distilling and selling, the federal government collected $10.4 billion in alcohol excise taxes in 2014, while states collected $6.2 billion.

More and more small or craft producers open shop every year, while consumers' purchasing expectations continue to change. Now, 82 years after the end of Prohibition, state regulation of alcohol is evolving with these market changes.

States have largely maintained a three-tier system in which producers, distributors and retailers are regulated separately, although the lines differentiating the groups have blurred a bit, raising concerns that the familiar system may disappear.

States have updated the three-tier system in two important ways: by allowing smaller producers to sell directly to consumers and by strengthening laws that keep distributors independent from producers.

Consumers Direct

All 50 states, the District of Columbia and Guam now have statutes that authorize tasting samples, either for a fee or for free, through manufacturers, retail package stores or at festivals and farmers markets. Allowing adults to taste and sample alcoholic beverages enhances the tour experience and is an effective way for producers to share with and teach consumers about their products.

More than 35 states, the District of Columbia and Guam also allow breweries, small brewers or brewpubs to sell directly to consumers who take the products elsewhere for consumption. At least 40 states and the District of Columbia allow wineries to sell on-site to consumers, and at least 25 states and the District of Columbia allow distilleries of various sizes to do so as well. Proponents argue that the sales increase the manufacturers' visibility and in the long run can help all three tiers of the regulatory system.

For example, Alaska lawmakers enacted legislation last year allowing small distillers to sell up to 1 gallon a day to a person for consumption off the premises. The legislation puts small distilleries on par with microbreweries in the state. "Outdated, Prohibition-era rules prevented similar treatment of reasonably priced, hand-crafted Alaska spirits, and the market continued to be dominated by large-scale, out-of-state manufacturers," House Minority Leader Chris Tuck...