Under pressure: buffeted by war and recession in 2003, the U.S. beer industry also faces inroads by spirits and growing pressure on the three-tier system

Modern Brewery Age, March 29, 2004

Overall, hopes for a turnaround in 2004 must be considered modest. Overseas, low-intensity conflict simmers in Iraq and Afghanistan, and domestic unemployment remains stubbornly high.

Distillers are enjoying their moment in the sun, helped along by brewers pushing their branded malternatives (For a historical examination of distilled spirits vs. malt beverage trends, see Chronicle of the Beer Wars, p. 19)

And after a drumbeat of direct shipping cases all through 2003, the Costco suit in Washington state struck like a clash of cymbals. The suit seeks to "subject [wholesalers] to market forces" by striking down the state's three-tier laws. The giant retailer wants to be able to buy direct, and receive direct shipments. No doubt the progress of this suit in being watched with interest at Wal-Mart headquarters.

The beer business weathered a tough year in '03, with perhaps tougher to come in '04.