Exclusive Alcohol Sales Agreement = No No

We ban these arrangements because of our experience before Prohibition. Those agreements and other business practices led to aggressive sales that increased consumption and social problems. For potentially dangerous products, special regulations are intended to prevent sales to vulnerable populations such as youth or heavy drinkers. We also want to curtail inducements that promote high volume consumption. Such regulations are not considered necessary for other commodities which are not subject to abuse.

To help understand the problem, let’s see how an exclusive agreement works:   In exchange for exclusivity, a retailer will get special prices or other benefits (cash payments, free equipment or labor, etc.) But the expectation is that the retailer will increase sales and profits for the wholesaler/manufacturer. And, of course with a reduced price, the retailer will need increased volume sales to make the same or greater profits. If these practices become widespread, you may see price wars and extreme competition that juice up sales. These are the kinds of things that led to huge social problems before Prohibition.