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Alcoholic Beverage Distributors and Wholesalers Key Terms

ByKim Finn, writer
Dec 03, 2011
Image Credit: Atstock Productions/Shutterstock
> Business Basics

Understanding terms every alcoholic beverage distributor should know

If you're thinking of jumping into the alcohol distributor business selling wine, beer or liquor, make sure you understand the terminology used in the industry.

When you're dealing with customers, they'll expect you to be on top of your game, and understanding key terminology brings you one step closer.

This guide starts first with the basic definition for an alcoholic beverage distributor and from there takes on relevant industry words and terms like distilled spirits, 27 CFR Part 1, three-tier system of alcohol distribution, proof and proof gallons.

Alcoholic beverage distributor

Alcoholic beverage distributor refers to the intermediary link between the manufacturer or importer and the retailer. The distributor function includes transportation, refrigeration (if necessary) and maintenance. Distributor roles also include working as exclusive agents for alcohol suppliers, offering guidance on product placement to alcohol retailers, training retail employees and distributing promotional materials. The terms alcoholic beverage distributors and alcoholic beverage wholesalers are typically considered synonymous.

Distilled spirits

The term distilled spirits (ethyl alcohol or liquor) refers to alcohol beverages made through fermentation and distillation processes. The definition includes whiskey, rum, brandy, gin and vodka but doesn't include beer and wine.

27 CFR Part 1

27 CFR Part 1 falls within the Code of Federal Regulations and addresses basic permit requirements under the Federal Alcohol Administration Act, Non-Industrial Use of Distilled Spirits and Wine, Bulk Sales and Bottling of Distilled Spirits.
27 CFR Part 1 from the Government Printing Office (GPO) Access.

Three-tier system of alcohol distribution

The three-tier system of alcohol distribution is a state-based regulatory alcohol control system comprised of suppliers (breweries, distilleries, wineries), distributors and retailers whose mission is to protect consumers from unsafe alcohol products and practices. The system was a response to post-Prohibition concern over consumption and consumer safety. It created a distinct separation between suppliers and retailers (wholesalers/distributors) that took away some of the power suppliers had over retailers.


Proof means the alcohol content of a liquid. Proof equals twice the percent of alcohol by volume. For example, whiskey containing 40% alcohol is 80 proof.

Kim Finn
Kim Finn
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