Abstract: This review examines the impact of the two-tier distribution system and restrictive tied house laws on the growth and competitive landscape of the craft beer industry in California. While these regulatory frameworks were originally established to prevent monopolistic control and promote responsible alcohol distribution, they have inadvertently created structural barriers for small and independent craft breweries. The two-tier system, which separates producers from distributors, limits market access for emerging breweries and consolidates power among a few dominant distributors. Simultaneously, California’s strict tied house laws—prohibiting breweries from having financial interests in retail outlets—constrain promotional flexibility and limit direct consumer engagement. This paper explores the historical origins of these regulations, analyzes their implications on market entry, branding, and economic scalability, and highlights how some legislative reforms and creative compliance strategies have attempted to foster industry growth. By synthesizing legal, economic, and entrepreneurial perspectives, this review provides critical insights into how regulatory constraints influence innovation, market diversity, and the sustainability of craft brewing in California.
Keywords: Craft Beer, Two-Tier System, Tied House Laws, Regulatory Barriers, California Brewing Industry.
Title: The Effect of the Two-Tier Systems and the Tight House Laws on the Growth of Craft Beer Industry in California
Author: Joy Odoyo Ajayi, Oladipo Olukunle Ajayi, Motunrayo Tolani Omidiora, George Addo, Amina Catherine Peter-Anyebe
International Journal of Social Science and Humanities Research
ISSN 2348-3156 (Print), ISSN 2348-3164 (online)
Vol. 13, Issue 3, July 2025 - September 2025
Page No: 33-47
Research Publish Journals
Website: www.researchpublish.com
Published Date: 07-July-2025
