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Why Beer Is The Most Highly Regulated Beverage When It Comes To Alcohol Payments

Posted by Terry Smith on September 19, 2016 4:29:48 PM EDT

When Prohibition officially began in 1920, the government put a ban on the legal manufacturing, sale, and transportation of all intoxicating beverages - but it wasn't illegal to drink them. This means if people still had some in their homes at that time, the government allowed them to drink it and they wouldn't consider them as breaking any laws.

Why Beer Is The Most Highly Regulated Beverage When It Comes To Alcohol PaymentsIn other decisions regarding what people could drink, they separated Beer and placed it in a different category from wine and spirits. This is because the government felt it didn't have any redeeming qualities. Sacramental wine was still permitted for religious purposes and they allowed drug stores to sell “medicinal whiskey” with doctors writing "prescriptions" giving permission to buy it.

Since its repeal in 1933, commerce in alcoholic beverages is still closely regulated today, but why is beer the most highly regulated beverage when it comes to alcohol payments?

SEE ALSO: Alcohol Electronic Reconciliation: Benefits of Automation

The Government saw Prohibition and temperance as good ideas at the time, but it turned honest people who just wanted a drink into "criminals" and there was a great loss of jobs and tax revenue also. Franklin Roosevelt signed the Cullen–Harrison Act in 1933 to allow the manufacture and sale of beer which was approximately 4% alcohol by volume at that time.

CNN.com reports that according to the Brewers Association, they sold more than 1.5 million barrels of beer in the first 24 hours that day. Everyone in the government saw this, for the first time, as something you could actually tax and would bring in significant revenue. That first day, the U.S. Treasury collected $7.5 million in tax receipts on beer sales and the rest is history. This day surely helped contribute to why beer is the most highly regulated beverage when it comes to alcohol payments today.

It seems as if the fight in disagreements over the sale of alcohol is still alive and well today. Wal-Mart filed a lawsuit recently claiming that the code preventing it from selling liquor in stores in Texas violates several Constitutional clauses. Although there are still disputes and we've come a long way since 1933, there are still higher regulations involving beer payments and how distributors and retailers conduct their financial transactions.

Here are some astounding facts:

  • In some states, they still require COD for Beer but wine and spirits may differ.
  • In other states, they require COD for beer, wine and spirits.
  • 15 of these states have controlled liquor.
As you can tell, beer is the most highly regulated beverage compared to wine and spirits especially when it comes to alcohol payments. Here's a closer look to get a better idea of what we mean:
  • Beer (COD)
    • Kentucky, Illinois, Indiana, Louisiana, Tennessee, Texas, Wyoming
  • Beer (Cash Only)
    • Mississippi
  • Beer, Wine (COD)
    • Alabama, Idaho, Ohio, Vermont, Virginia
  • Beer, Wine, Distilled Spirits (COD)
    • Arizona, Arkansas, Oklahoma, Washington, Georgia- (Beer (COD), unless the retailer owns more than one business; Wine, Distilled Spirits (COD)

SEE ALSO: 7 Common Misconceptions About Alcohol Payment Regulations

We realize that city, county, or state level beer boards govern these laws and that it's always best to conform to these regulations in order to stay compliant. However, things are changing for the better everyday. Most states now allow the use of electronic funds transfer or EFT payment solutions to provide Retailers and Distributors with a payment alternative that is one of the best cash management tools today.

Wholesalers can now minimize their cash & check handling, reduce risk of theft and the loss or misplacement of payments. Retailers enjoy the benefits of less time receiving products when they come in, less cash handling, and more time to get back to the business of making money. This convenience allows these businesses to exchange money between each other electronically instead of through checks or with cash, is helping take some of the sting out of these highly regulated beer payments.

All EFT solutions are not created equal, however. It is iControl's mission to provide smart, progressive companies with the innovation that helps improve performance and reduce costs so you can do business more profitably. By providing you with an electronic payment solution for Beer, Wine & Spirits, we give you industry-leading technology that is convenient, compliant, and secure - at a fair price. In this way, you will see more economic savings along with the service and support you need. 

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Topics: Alcohol Payments

Written by Terry Smith

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