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Europeans monitor three-tier system.

American wholesalers and brewers have not been the only ones watching GATT deliberations carefully. A recent article in the German magazine Brauindustrie, was titled "Free trade coming in U.S. beer market."

In the article, the author reported that, "The so-called three-tier system operated by the American beer industry is being seriously challenged. Under attack from abroad and within the U.S., few believe beer distribution will stay as it is much longer."

The article cites the GATT disputes between Canada and the U.S. as watersheds in the evolution of the American market, and said, "The outcome of their trade war looks set to improve the situation in the U.S. market for all foreign brands."

The author also points to the growth of large chain stores, noting the pressures that these outlets are placing on the three-tier system.

"The latest plan comes from Wal-Mart, a large discount chain which is proposing to enter the beer trade," Brauindustrie reported. "It has told brewers the company want to operate its own distribution system, outside the existing wholesaler network. Since pricing and hence sales could be affected by the removal of the middlemen, it is hard to see how beer makers can resist doing business direct with the chains.

"If and when this breakthrough happens," Brauindustrie concluded, "European and other imported beers stand to benefit. Importers will be able to truck consignments direct to retailers, or use distributors of their choice."
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Title Annotation:brewing industry
Publication:Modern Brewery Age
Date:Nov 9, 1992
Words:240
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