What type of establishment can brew and retail beer according to the exceptions in the three tier system?

Brewpubs that both brew and retail are able to operate under certain exceptions in the three-tier system of alcohol distribution. This system was established to prevent monopolies and promote fair competition by separating the roles of producers, wholesalers, and retailers. However, brewpubs, which by definition brew their own beer on-site and serve it directly to customers, can function within this system without being strictly categorized as one of the three tiers.

Brewpubs uniquely blend the brewery and retail functions, allowing them to produce and sell their own beer directly to consumers, usually on-premises. This presents a model that supports local economies and craft beer culture, while still complying with regulatory frameworks. Given that brewpubs can serve their beer directly to patrons while also conducting brewing operations, they fit neatly into the exceptions made for establishments that can bypass the standard three-tier protocol, which typically prohibits any overlap in production and sales channels.

In contrast, other options like wholesalers or only large breweries do not have the same ability to brew and retail simultaneously under the same roof. Wholesalers focus solely on distribution without manufacturing, and large breweries usually do not operate in a retail capacity, as their primary business model is scaled production for wider distribution.