<P> The three - tier system of alcohol distribution is the system for distributing alcoholic beverages set up in the United States after the repeal of Prohibition . The three tiers are importer or producers, distributors, and retailers . The basic structure of the system is that producers can sell their products only to wholesale distributors who then sell to retailers, and only retailers may sell to consumers . Producers include brewers, wine makers, distillers and importers . </P> <P> Some states chose to become alcoholic beverage control jurisdictions after Prohibition . In these states, part or all of the distribution tier, and sometimes also the retailing tier, are operated by the state government itself (or by contractors operating under its authority) rather than by independent private entities . </P> <P> The only state with a privately operated retailing and distribution system that does not require any form of three - tier system is the State of Washington . In Washington, retailers may purchase alcoholic beverages directly from producers, may negotiate volume discounts, and may warehouse their inventory themselves . However, the three - tier system largely remains in fact a reality in Washington despite the lack of a law requiring it . </P>

Which of the following is a notable exception to the three-tier system in many states