Liquor Giant Targets System Dating to End of Prohibition

Thursday, May 8th, 2003

When I hear someone mention antiquated liquor laws, my Pennsylvanian ears perk up. Liquor Giant Targets System Dating to End of Prohibition discusses why “liquor stores seem frozen in time”:

For 70 years, booze purveyors have grappled with restrictions aimed at ending the mob influence that had permeated the business in the 1920s and early 1930s. Spirits makers are barred from selling directly to liquor stores, restaurants and bars, for example. Instead, they have to go through a tier of huge wholesale distributors, and thus have had little control over how their products are presented to consumers.

Sales reps from the liquor distributors often show up at bars and liquor stores with a Diageo product under one arm and a rival’s under the other, making it tough for manufacturers to implement marketing strategies. A hodgepodge of state-by-state regulations means some liquor retailers are state-owned, some are large grocery chains and many are mom-and-pop “package stores.” No mass-market retailer has emerged.

Those restrictions also explain why, in contrast to the palatial supermarkets and ubiquitous convenience stores where beer is often sold, many liquor stores seem frozen in time, with their products piled up in drab displays. The big food and consumer-products companies are free to sell directly to retailers, and work closely with them to showcase their wares on eye-catching platforms. Spirits makers can’t.

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