Tony Talks Business
How Liquor Stores Make Money
Do you know who is legally allowed to sell your local liquor store the bottle sitting on its shelf? Ever wondered why the shop on your corner charges four dollars more than the warehouse club for exactly the same bottle? And what happens when the middleman the law protects goes bankrupt?
This is how liquor stores actually make money, and why the price on the tag was decided long before the shop ever saw the bottle.
The numbers in this video
2 to 10%The net profit most independent liquor stores land on. A well run one nets about 8 to 15%.Source: mPower Beverage
1,100Around how many wine distributors were left in the United States by the late 2010s, down from about 3,000 in 1995.Source: Food & Power, 2017
$26BAbout how much business Southern Glazer's, the largest distributor, did in 2023.Source: FTC press release, December 2024
6 to 30%One study's estimate of what post and hold rules add to beer and wine prices. The study's own range is 6.4% to 30%.Source: Mackinac, citing Cooper & Wright
5.5%About what a retailer in Iowa earns on every lottery ticket sold.Source: Iowa Lottery
Every number has a source
Chapters
- 0:00The Bottle
- 1:37The Shelf
- 3:34The Repeal
- 4:42The Tiers
- 5:35The Middle
- 7:15The Franchise
- 8:35The Posting
- 9:45The Gap
- 11:28The Counter
- 13:19The State
- 14:42The Collapse
- 16:21The Verdict
What we left out
Claims we found and could not stand behind, so they are not in the video.
The line that two firms control 60% of distribution. It was a projection of a merger that was called off, so it is not used.
How many dollars more the independent shop pays than the chain. The FTC complaint gives no dollar gap, so the video gives none.
What the distillery and the distributor each take from one bottle. The research did not pin down a sourced per-bottle chain, so the video gives no such split.
Sources
10 pages the figures in this video were read from.
