The Three-Tiered System — Producer/Distributor/Retailer — is a remnant of Prohibition. Before Prohibition, wine distribution was relatively unregulated. Producers of grape products often sold their goods in bulk right off trains. Those products included grape clusters and grape concentrate which were bought by private parties as well as retailers. The Three-Tiered System dominated U.S. wine sales after the repeal of Prohibition and continues to do so. The system creates a middle profit level that raises the price of wine at the retail level, but promotes wide access to a winery’s products and frees producers from navigating through a maze of individual state regulations.

Wineries in most regions were always allowed to sell their products directly through their tasting rooms, eliminating the middle profit level to the winery’s advantage. But selling most of a winery’s inventory to a distributor who markets products to a large geographical region leads to much greater sales but at less profit per product to the winery. Over the past decade U.S. laws regulating wine distribution have been relaxed considerably with the happy result that many states that formerly disallowed wineries to ship wine into their state now permit it. Wineries have been quick to respond. Direct sales to customers nationwide are now available in most western and eastern states and the midwestern states are slowly catching up. Canada still remains a wine-procuring backwater with arcane provincial policies; but these are beginning to relax, too, particularly in wine producing provinces such as Ontario.