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South Carolina’s beer wholesalers operate in a unique regulatory environment that was established by the 21st Amendment to the U.S. Constitution, as well as the federal and state governments in the wake of the repeal of prohibition. Beer wholesalers occupy the middle tier of a three-tier system established for the distribution and sale of beer. This system was designed to insulate retailers from control by suppliers, encourage moderation in consumption, guarantee full collection of state and federal taxes and permit states to impose rules and regulations on the licensed beverage industry that reflect their own practices and beliefs. This three-tier system has far exceeded its creators’ expectations. It is highly efficient and extremely responsive to local concerns. Because of the three-tier system , beer is one of the best deals in the marketplace today.

 

A Brief History of the Creation of the Three-Tier System

Acting like a safety net, the three-tier safeguard system provides for “checks and balances” in the way that alcohol is distributed and sold to retailers as well as consumers. Producers sell to licensed beverage distributors, wholesalers sell to properly licensed retailers, and retailers sell alcoholic beverages to the public . Taxes are collected through each tier of the distribution system. This philosophy of distribution was created in the wake of Prohibition in order for alcoholic beverages to be made available to the public in a controlled and safe manner. The strength of this system is its licensed nature. Anyone who wants to brew, distribute, deliver merchandise or promote alcohol must be licensed. Our State system has established that you can only operate within one tier of the three tier system.

 

 

The Supplier manufactures the product. It sets the standards for freshness and ensures that the product is made with the finest available ingredients.

Tax Dollars Collected:

  • Federal Excise Taxes

 

 

Distributor. The wholesaler is usually a local family business that distributes product in compliance with state and local laws. As part of the three-tier system, the wholesaler provides competition, innovation and selection for the consumer; ease of entry for new products and small manufacturers; and tax benefits for our state. As a local business, each wholesaler participates in many local civic and charitable activities.

Tax Dollars Collected:

  • Applicable State and Local Taxes
  • Payroll Taxes
  • Federal Income Tax
  • State and Local Income Taxes
  • State and Local License Fees

 

 

Your local retailers include both On-Premise and Off-Premise establishments. An example of On-Premise would be restaurants, bars and taverns where licensed alcohol products are purchased and consumed by the public. Off-Premise examples include grocery, supermarket, club stores, convenience stores and package goods stores where licensed alcohol beverages are purchased to be consumed by the public.

Tax Dollars Collected

  • State Sales Tax
  • Local Sales Taxes
  • State and Local License Fees
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