The three-tier system makes it difficult for small breweries, wineries, and distilleries to enter the market. Without the three-tier system, these small businesses could ship directly to local bars and retail stores making it much easier to start and grow their businesses.
Because the three-tier system requires small producers to go through distributors to sell to retailers, and distributor warehouses can only carry so much product, it becomes difficult for small businesses to get their product out. This not only hurts the small businesses, but also hurts the consumer by limiting the selection and increasing the prices.