- The state licensed system of alcohol distribution prevents
vertical integration of the alcohol industry, thereby protecting
competition and consumer choice from the corrosive effects of
conglomerate monopolies.
- Regulations effectively require the wholesale tier to consist
of a large number of mostly smaller businesses, which must be
state-licensed entities. Thus, wholesalers are easier to regulate
than remote companies, some of which might be located overseas.
Cross-checks ensure that every product sold in the state pays
its fair share of taxes, collected by the licensees themselves.
- Most importantly, since manufacturers cannot control the wholesale
tier, it is relatively easy for new products to enter the industry
and gain market access through such independent distributors.
- Consumer choice and competition are guaranteed by restricting
unfair trade practices.
- Retailers operate free from
undue pressure to buy particular products.
- It is illegal for big retailers
to pressure wholesalers to provide concessions unavailableto small "mom and pop" stores.
- Wholesalers cannot "buy"
retail shelf space. If allowed, this would restrict consumer
choice.
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