Justice STEVENS announced the judgment of the Court and delivered an opinion in which THE CHIEF JUSTICE, Justice WHITE, and Justice O'CONNOR Join.The United States and the State of North Dakota exercise concurrent jurisdiction over the Grand Forks Air Force Base and the Minot Air Force Base.  Each sovereign has its own separate regulatory objectives with respect to the area over which it has authority.  The Department of Defense (DoD), which operates clubs and package stores located on those bases, has sought to reduce the price that it pays for alcoholic beverages sold on the bases by instituting a system of competitive bidding.  The State, which has established a liquor distribution system in order to promote temperance and ensure orderly market conditions, wishes to protect the integrity of that system by requiring out-of-state shippers to file monthly reports and to affix a label to each bottle of liquor sold to a federal enclave for domestic consumption.  The clash between the State's interest in preventing the diversion of liquor and the federal interest in obtaining the lowest possible price forms the basis for the Federal Government's Supremacy Clause and preemption challenges to the North Dakota regulations. Page 495 U. S. 427IThe United States sells alcoholic beverages to military personnel and their families at clubs and package stores on its military bases.  The military uses revenue from these sales to support a morale, welfare, and recreation program for personnel and their families.  See 32 CFR § 261.3 (1989); DoD Directive 1015.1 (Aug. 19, 1981).  Before December, 1985, no federal statute governed the purchase of liquor for these establishments.  From December 19, 1985, to October 19, 1986, federal law required military bases to purchase alcoholic beverages only within their home State.  See Pub.L. 99-190, § 8099, 99 Stat. 1219.  Effective October 30, 1986, Congress eliminated the requirement that the military purchase liquor from within the State, and directed that distilled spirits be "procured from the most competitive source, price and other factors considered."  Pub.L. 99661, § 313, 100 Stat. 3853, 10 U.S.C. § 2488(a). [Footnote 1]In accordance with this statute, the Department of Defense (DoD) has developed a joint military purchasing program to buy liquor in bulk directly from the Nation's primary distributors who offer the lowest possible prices.  Purchases are made pursuant to a DoD regulation which provides that:"The Department of Defense shall cooperate with local, state, and federal officials to the degree that their duties relate to the provisions of this chapter.  However, the purchase of all alcoholic beverages for resale at any camp, post station, base, or other DoD installation within the United States shall be in such a manner and under such conditions as shall obtain for the government the most advantageous contract, price and other considered factors.  These other factors shall not be construed as meaning any submission to state control, nor shall cooperation Page 495 U. S. 428 be construed or represented as an admission of any legal obligation to submit to state control, pay state or local taxes, or purchase alcoholic beverages within geographical boundaries or at prices or from suppliers prescribed by any state."32 CFR § 261.4 (1989).Since long before the enactment of the most recent procurement statute, the State of North Dakota has regulated the importation and distribution of alcoholic beverages within its borders.  See N.D.Cent.Code, ch. 5 (1987 and Supp.1989).  Under the State's regulatory system, there are three levels of liquor distributors:  out-of-State distillers/suppliers, state-licensed wholesalers, and state-licensed retailers.  Distillers/suppliers may sell to only licensed wholesalers or federal enclaves.  N.D.Admin.Code § 84-02-01-05(2) (1987).  Licensed wholesalers, in turn, may sell to licensed retailers, other licensed wholesalers, and federal enclaves.  N.D.Cent.Code 5-03-01 (1987).  Taxes are imposed at both levels of distribution.  N.D.Cent.Code § 5-03-07 (1987); N.D.Cent.Code, ch. 5739.2 (Supp.1989).  In order to monitor the importation of liquor, the State since 1978 has required all persons bringing liquor into the State to file monthly reports documenting the volume of liquor they have imported.  The reporting regulation provides:"All persons sending or bringing liquor into North Dakota shall file a North Dakota Schedule A Report of all shipments and returns for each calendar month with the state treasurer.  The report must be postmarked on or before the fifteenth day of the following month."N.D.Admin.Code § 84-02-01-05(1) (1986).Since 1986, the State has also required out-of-state distillers who sell liquor directly to a federal enclave to affix labels to each individual item indicating that the liquor is for domestic consumption only within the federal enclave.  The labels may be purchased from the state treasurer for a small sum or printed by the distillers/suppliers themselves according Page 495 U. S. 429 to a state-approved format.  App. 34.  The labeling regulation provides:"All liquor destined for delivery to a federal enclave in North Dakota for domestic consumption and not transported through a licensed North Dakota wholesaler for delivery to such bona fide federal enclave in North Dakota shall have clearly identified on each individual item that such shall be for consumption within the federal enclave exclusively.  Such identification must be in a form and manner prescribed by the state treasurer."N.D.Admin.Code § 84-02-01-05(7) (1986).Within the State of North Dakota, the United States operates two military bases:  Grand Forks Air Force Base and Minot Air Force Base.  The State and Federal Government exercise concurrent jurisdiction over both. [Footnote 2]  Shortly after the effective date of the procurement statute permitting the military to make purchases from out-of-state, the state treasurer conducted a meeting with out-of-state suppliers to explain the labeling and reporting requirements.  App. 34.  Five out-of-state distillers and importers thereupon informed federal military procurement officials that they would not ship liquor to the North Dakota bases because of the burden of complying with the North Dakota regulations. [Footnote 3]  A sixth supplier, Kobrand Importers, Inc., increased its prices from between $.85 and $20.50 per case to reflect the cost of labeling and reporting. Page 495 U. S. 430The United States instituted this action in the United States District Court for the District of North Dakota seeking declaratory and injunctive relief against the application of the State's regulations to liquor destined for federal enclaves.  The District Court denied the United States' cross-motion for summary judgment and granted the State's motion.  The court reasoned that there was no conflict between the state and federal regulations because the state regulations did not prevent the Government from obtaining beverages at the "lowest cost."  675 F. Supp. 555, 557 (N.D.1987).  A divided United States Court of Appeals for the Eighth Circuit reversed.  856 F.2d 1107 (1988).  While recognizing that "nothing in the record compels us to believe that the regulations are a pretext to require in-state purchases," id. at 1113, the majority held that the regulations impermissibly made out-of-state distillers less competitive with local wholesalers.  Ibid.  Chief Judge Lay argued in dissent that the effect on the Federal Government was a permissible incident of regulations passed pursuant to the State's powers under the Twenty-first Amendment.  Id. at 1115-1116.  We noted probable jurisdiction, 489 U.S. 1095 (1989), and now reverse.IIThe Court has considered the power of the States to pass liquor control regulations that burden the Federal Government in four cases since the ratification of the Twenty-first Amendment. [Footnote 4]  See Collins v. Yosemite Park & Curry Co., 304 U. S. 518 (1938); Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U. S. 324 (1964); United States v. Mississippi Tax Comm'n, 412 U. S. 363 (1973) (Mississippi Tax Comm'n I); United States v. Mississippi Tax Comm'n, 421 U. S. 599 (1975) (Mississippi Tax Comm'n II); see also Johnson v. Page 495 U. S. 431 Yellow Cab Transit Co., 321 U. S. 383 (1944).  In each of those cases, we concluded that the State has no authority to regulate in an area or over a transaction that fell outside of its jurisdiction.  In Collins, we held that the Twenty-first Amendment did not give the States the power to regulate the use of alcohol within a national park over which the Federal Government had exclusive jurisdiction.  In Hostetter, we held that the Twenty-first Amendment conferred no authority to license the sale of tax-free liquors at an airport for delivery to foreign destinations made under the supervision of the United States Bureau of Customs.  Mississippi Tax Comm'n I held that the State had no authority to regulate a transaction between an out-of-state liquor supplier and a federal military base within the exclusive federal jurisdiction.  And in Mississippi Tax Comm'n II we held that the State has no authority to tax directly a federal instrumentality on an enclave over which the United States exercised concurrent jurisdiction.At the same time, however, within the area of its jurisdiction, the State has "virtually complete control" over the importation and sale of liquor and the structure of the liquor distribution system.   See California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., 445 U. S. 97,  445 U. S. 110 (1980); see also Capital Cities Cable, Inc. v. Crisp, 467 U. S. 691,  467 U. S. 712 (1984); California Board of Equalization v. Young's Market Co., 299 U. S. 59 (1936).  The Court has made clear that the States have the power to control shipments of liquor during their passage through their territory and to take appropriate steps to prevent the unlawful diversion of liquor into its regulated intrastate market.  In Hostetter, we stated that our decision in Collins, striking down the California Alcoholic Beverage Control Act as applied to an exclusive federal reservation, might have been otherwise if"California had sought to regulate or control the transportation of the liquor there involved from the time of its entry into the State until its delivery at the national park, in the interest of preventing Page 495 U. S. 432 unlawful diversion into her territory."377 U.S. at  377 U. S. 333.  We found that the state licensing law there under attack was unlawful because New York"ha[d] not sought to regulate or control the passage of intoxicants through her territory in the interest of preventing their unlawful diversion into the internal commerce of the State.  As the District Court emphasized, this case does not involve 'measures aimed at preventing unlawful diversion or use of alcoholic beverages within New York.'  [Commonwealth of Puerto Rico v. Condado Development Corp.] 212 F.Supp. [386] at 386 [D.P.R. 1961]."Id. 377 U.S. at  377 U. S. 333-334.In Mississippi Tax Comm'n I, supra, after holding that the State could not impose its normal markup on sales to the military bases, we added that"a State may, in the absence of conflicting federal regulation, properly exercise its police powers to regulate and control such shipments during their passage through its territory insofar as necessary to prevent the 'unlawful diversion' of liquor 'into the internal commerce of the State.'"412 U.S. at  412 U. S. 377-378 (citations omitted).The two North Dakota regulations fall within the core of the State's power under the Twenty-first Amendment.  In the interest of promoting temperance, ensuring orderly market conditions, and raising revenue, the State has established a comprehensive system for the distribution of liquor within its borders.  That system is unquestionably legitimate.  See Carter v. Virginia, 321 U. S. 131 (1944); California Board of Equalization v. Young's Market Co., 299 U. S. 59 (1936). The requirements that an out-of-state supplier which transports liquor into the State affix a label to each bottle of liquor destined for delivery to a federal enclave and that it report the volume of liquor it has transported are necessary components of the regulatory regime.  Because liquor sold at Grand Forks and Minot Air Force Bases has been purchased directly from out-of-state suppliers, neither the markup nor the state taxes paid by liquor wholesalers and retailers in North Dakota is reflected in the military purchase price.  Moreover, the federal enclaves are not governed by Page 495 U. S. 433 state laws with respect to the sale of intoxicants; the military establishes the type of liquor it sells, the minimum age of buyers, and the days and times its package stores will be open.  The risk of diversion into the retail market and disruption of the liquor distribution system is thus both substantial and real. [Footnote 5]  It is necessary for the State to record the volume of liquor shipped into the State and to identify those products which have not been distributed through the State's liquor distribution system.  The labeling and reporting requirements unquestionably serve valid state interests. [Footnote 6]  Given the special protection afforded to state liquor control policies by the Twenty-first Amendment, they are supported by a strong presumption of validity, and should not be set aside lightly.  See, e.g., Capital Cities Cable, Inc. v. Crisp, 467 U.S. at  467 U. S. 714. Page 495 U. S. 434IIIState law may run afoul of the Supremacy Clause in two distinct ways:  the law may regulate the Government directly or discriminate against it, See McCulloch v. Maryland, 4 Wheat. 316,  17 U. S. 425-437 (1819), or it may conflict with an affirmative command of Congress.  See Gibbons v. Ogden, 9 Wheat. 1,  22 U. S. 211 (1824); see also Hillsborough County v. Automated Medical Labs., Inc., 471 U. S. 707,  471 U. S. 712-713 (1985).  The Federal Government's attack on the regulations is based on both grounds of invalidity.The Government argues that the state provisions governing the distribution of liquor by out-of-state shippers "regulate" governmental actions, and are therefore invalid directly under the Supremacy Clause.  The argument is unavailing.  State tax laws, state licensing provisions, contract laws, even "a statute or ordinance regulating the mode of turning at the corner of streets," Johnson v. Maryland, 254 U. S. 51,  254 U. S. 56 (1920), no less than the reporting and labeling regulations at issue in this case, regulate federal activity in the sense that they make it more costly for the Government to do its business.  At one time, the Court struck down many of these state regulations, see Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U. S. 218,  277 U. S. 222 (1928) (state tax on military contractor); Dobbins v. Commissioners of Erie County, 16 Pet. 435 (1842) (tax on federal employee); Gillespie v. Oklahoma, 257 U. S. 501 (1922) (tax on lease of federal property); Weston v. City Council of Charleston, 2 Pet. 449 (1829) (tax on federal bond), on the theory that they interfered with "the constitutional means which have been legislated by the government of the United States to carry into effect its powers."  Dobbins, 16 Pet. at  41 U. S. 449.  Over 50 years ago, however, the Court decisively rejected the argument that any state regulation which indirectly regulates the Federal Government's activity is unconstitutional, see James v. Dravo Contracting Co., 302 U. S. 134 (1937), and that view has now been "thoroughly Page 495 U. S. 435 repudiated."  South Carolina v. Baker, 485 U. S. 505,  485 U. S. 520 (1988); see also California Board of Equalization v. Sierra Summit, Inc., 490 U. S. 844,  490 U. S. 848 (1989); Cotton Petroleum Corp. v. New Mexico, 490 U. S. 163,  490 U. S. 174 (1989).The Court has more recently adopted a functional approach to claims of governmental immunity, accommodating of the full range of each sovereign's legislative authority and respectful of the primary role of Congress in resolving conflicts between National and State Government.  See United States v. County of Fresno, 429 U. S. 452,  429 U. S. 467-468 (1977); cf. Garcia v. San Antonio Metropolitan Transit Auth., 469 U. S. 528 (1985).  Whatever burdens are imposed on the federal government by a neutral state law regulating its suppliers "are but normal incidents of the organization within the same territory of two governments."  Helvering v. Gerhardt, 304 U. S. 405,  304 U. S. 422 (1938); see also South Carolina v. Baker, 485 U.S. at  485 U. S. 520-521; Penn Dairies, Inc. v. Milk Control Comm'n of Pennsylvania, 318 U. S. 261,  318 U. S. 271 (1943); Graves v. New York ex rel. O'Keefe, 306 U. S. 466,  306 U. S. 487 (1939).  A state regulation is invalid only if it regulates the United States directly or discriminates against the Federal Government or those with whom it deals.  South Carolina v. Baker, 485 U.S. at  485 U. S. 523; County of Fresno, 429 U.S. at  429 U. S. 460.  In addition, the question whether a state regulation discriminates against the Federal Government cannot be viewed in isolation.  Rather, the entire regulatory system should be analyzed to determine whether it is discriminatory "with regard to the economic burdens that result."  Washington v. United States, 460 U. S. 536,  460 U. S. 544 (1983).  Claims to any further degree of immunity must be resolved under principles of congressional preemption.  See, e.g., Penn Dairies, Inc. v. Milk Control Comm'n, 318 U.S. at  318 U. S. 271; James v. Dravo Contracting Co., 302 U.S. at  302 U. S. 161. [Footnote 7] Page 495 U. S. 436Application of these principles to the North Dakota regulations demonstrates that they do not violate the intergovernmental immunity doctrine.  There is no claim in this case, nor could there be, that North Dakota regulates the Federal Government directly.  See United States v. New Mexico, Page 495 U. S. 437 455 U. S. 720 (1982); Hancock v. Train, 426 U. S. 167 (1976); Mississippi Tax Comm'n II, 421 U.S. at  421 U. S. 608-610; Mayo v. United States, 319 U. S. 441 (1943).  Both the reporting requirement and the labeling regulation operate against suppliers, not the Government, and concerns about direct interference with the Federal Government, see City of Detroit v. Murray Corp. of America, 355 U. S. 489,  355 U. S. 504-505 (1958) (opinion of Frankfurter, J.), therefore are not implicated.  In this respect, the regulations cannot be distinguished from the price control regulations and taxes imposed on government contractors that we have repeatedly upheld against constitutional challenge.  See United States v. City of Detroit, 355 U. S. 466 (1958); Penn Dairies, Inc., 318 U.S. at  318 U. S. 279-280; Alabama v. King & Boozer, 314 U. S. 1,  314 U. S. 8 (1941). [Footnote 8]Nor can it be said that the regulations discriminate against the Federal Government or those with whom it deals.  The nondiscrimination rule finds its reason in the principle that the States may not directly obstruct the activities of the Federal Page 495 U. S. 438 Government.  McCulloch v. Maryland, 4 Wheat. 316,  17 U. S. 425-437 (1819). [Footnote 9]  Since a regulation imposed on one who deals with the Government has as much potential to obstruct governmental functions as a regulation imposed on the Government itself, the Court has required that the regulation be one that is imposed on some basis unrelated to the object's status as a government contractor or supplier, that is, that it be imposed equally on other similarly situated constituents of the State.  See, e.g., United States v. County of Fresno, 429 U.S. at  429 U. S. 462-464.  Moreover, in analyzing the constitutionality of a state law, it is not appropriate to look to the most narrow provision addressing the Government or those with whom it deals.  A state provision that appears to treat the Government differently on the most specific level of analysis may, in its broader regulatory context, not be discriminatory.  We have held that"[t]he State does not discriminate against the Federal Government and those with whom it deals unless it treats someone else better than it treats them."Washington v. United States, 460 U.S. at  460 U. S. 544-545. [Footnote 10]The North Dakota liquor control regulations, the regulatory regime of which the Government complains, do not disfavor the Federal Government, but actually favor it.  The Page 495 U. S. 439 labeling and reporting regulations are components of an extensive system of statewide regulation that furthers legitimate interests in promoting temperance and controlling the distribution of liquor, in addition to raising revenue.  The system applies to all liquor retailers in the State.  In this system, the Federal Government is favored over all those who sell liquor in the State.  All other liquor retailers are required to purchase from state-licensed wholesalers, who are legally bound to comply with the State's liquor distribution system.  N.D.Cent.Code § 5-03-01.1 (1987).  The Government has the option, like the civilian retailers in the State, to purchase liquor from licensed wholesalers.  However, alone among retailers in the State, the Government also has the option to purchase liquor from out-of-state wholesalers if those wholesalers comply with the labeling and reporting regulations.  The system does not discriminate "with regard to the economic burdens that result."  Washington, 460 U.S. at  460 U. S. 544.  A regulatory regime which so favors the Federal Government cannot be considered to discriminate against it.IVThe conclusion that the labeling regulation does not violate the intergovernmental immunity doctrine does not end the inquiry into whether the regulation impermissibly interferes with federal activities.  Congress has the power to confer immunity from state regulation on government suppliers beyond that conferred by the Constitution alone, see, e.g., United States v. New Mexico, 455 U.S. at  455 U. S. 737-738; Penn Dairies, Inc., 318 U.S. at  318 U. S. 275, even when the state regulation is enacted pursuant to the State's powers under the Twenty-first Amendment.  Capital Cities Cable, Inc. v. Crisp, 467 U.S. at  467 U. S. 713.  But when the Court is asked to set aside a regulation at the core of the State's powers under the Twenty-first Amendment, as when it is asked to recognize an implied exemption from state taxation, see Rockford Life Page 495 U. S. 440 Ins. Co. v. Illinois Dept. of Revenue, 482 U. S. 182,  482 U. S. 191 (1987), it must proceed with particular care.  Capital Cities Cable, 467 U.S. at  467 U. S. 714.  Congress has not here spoken with sufficient clarity to preempt North Dakota's attempt to protect its liquor distribution system.The Government's claim that the regulations are preempted rests upon federal statute and federal regulation.  The federal statute is 10 U.S.C. § 2488, which governs the procurement of alcoholic beverages by nonappropriated fund instrumentalities.  It provides simply that purchases of alcoholic beverages for resale on military installations "shall be made from the most competitive source, price and other factors considered," § 2488(a)(1), but that malt beverages and wine shall be purchased from sources within the State in which the installation is located.  It may be inferred from the latter provision as well as from the provision, elsewhere in the Code, that alcoholic beverages purchased for resale in Alaska and Hawaii must be purchased in-state, Act of Oct. 30, 1986, Pub.L. 99-591, § 9090, 100 Stat. 3341-116, that Congress intended for the military to be free in the other 48 States to purchase liquor from out-of-state wholesalers.  It follows that the States may not directly restrict the military from purchasing liquor out-of-state.  That is the central lesson of our decisions in Paul v. United States, 371 U. S. 245 (1963); United States v. Georgia Public Service Comm'n, 371 U. S. 285 (1963); Public Utilities Comm'n of California v. United States, 355 U. S. 534 (1958); and Leslie Miller, Inc. v. Arkansas, 352 U. S. 187 (1956), in which we invalidated state regulations that prohibited what federal law required.  We stated in Paul that there was a "collision . . . clear and acute," between the federal law which required competitive bidding among suppliers and the state law which directly limited the extent to which suppliers could compete.  371 U.S. at  371 U. S. 253.It is one thing, however, to say that the State may not pass regulations which directly obstruct federal law; it is quite Page 495 U. S. 441 another to say that they cannot pass regulations which incidentally raise the costs to the military.  Any number of state laws may make it more costly for the military to purchase liquor.  As Chief Judge Lay observed in dissent,"[c]ompliance with regulations regarding the importation of raw materials, general operations of the distillery or brewery, treatment of employees, bottling, and shipping necessarily increase the cost of liquor."856 F.2d  at 1116.  Highway tax laws and safety laws may make it more costly for the military to purchase from out-of-state shippers.The language used in the 1986 procurement statute does not expressly preempt any of these state regulations or address the problem of unlawful diversion of liquor from military bases into the civilian market.  It simply states that covered alcoholic beverages shall be obtained from the most competitive source, price and other factors considered.  As the District Court observed, however, "[l]owest cost' is a relative term."  675 F. Supp.  at 557.  The fact that the reporting and labeling regulations, like safety laws or minimum wage laws, increase the costs for out-of-state shippers does not prevent the Government from obtaining liquor at the most competitive price, but simply raises that price.  The procurement statute does not cut such a wide swath through state law as to invalidate the reporting and labeling regulations.In this case, the most competitive source for alcoholic beverages are out-of-state distributors, whose prices are lower than those charged by North Dakota wholesalers, regardless of whether or not the labeling and reporting requirements are enforced.  The North Dakota regulations, which do not restrict the parties from whom the Government may purchase liquor or its ability to engage in competitive bidding, but at worst raises the costs of selling to the military for certain shippers, do not directly conflict with the federal statute. Page 495 U. S. 442VThe DoD regulation restates, in slightly different language, [Footnote 11] the statutory requirement that distilled spirits be "procured from the most competitive source, price and other factors considered," but it does not purport to carry a greater preemptive power than the statutory command itself.  It is Congress -- not the Department of Defense -- that has the power to preempt otherwise valid state laws, and there is no language in the relevant statute that either preempts state liquor distribution laws or delegates to the Department of Defense the power to preempt such state laws. [Footnote 12]Nor does the text of the DoD regulation itself purport to preempt any state laws.  See California Coastal Comm'n v. Granite Rock Co., 480 U. S. 572,  480 U. S. 583 (1987); Hillsborough County v. Automated Medical Laboratories, Inc., 471 U. S. 707,  471 U. S. 717-718 (1985).  It directs the military to consider various factors in determining "the most advantageous contract, price and other considered factors," but that command cannot be understood to preempt state laws that have the incidental effect of raising costs for the military.  Indeed, the regulation specifically envisions some regulation by state law, for it provides that the Department "shall cooperate with local [and] state . . . officials . . . to the degree that their duties relate to the provisions of this chapter."  The regulation Page 495 U. S. 443 does admonish that such cooperation should not be construed as an admission that the military is obligated to submit to state control or required to buy from suppliers located within the State or prescribed by the State.  The North Dakota regulations, however, do not require the military to submit to state control or to purchase alcoholic beverage from suppliers within the State or prescribed by the State.  The DoD regulation has nothing to say about labeling or reporting by out-of-state suppliers.When the Court is confronted with questions relating to military discipline and military operations, we properly defer to the judgment of those who must lead our armed forces in battle.  But in questions relating to the allocation of power between the Federal and State Government on civilian commercial issues, we heed the command of Congress without any special deference to the military's interpretation of that command.The present record does not establish the precise burdens the reporting and labeling regulations will impose on the Government, but there is no evidence that they will be substantial.  The reporting requirement has been in effect since 1978, and there is no evidence that it has caused any supplier to raise its costs or stop supplying the military.  Although the labeling regulation has caused a few suppliers either to adjust their prices or to cease direct shipments to the bases, there has been no showing that there are not other suppliers willing to enter the market, and there is no indication that the Government has made any attempt to secure other out-of-state suppliers.  The cost of the labels is approximately three to five cents if purchased from the state treasurer, and the distillers have the right to print their own labels if they prefer.  App. 34.  Even in the initial stage of enforcing the requirement for the two bases in North Dakota, various distillers and suppliers have already notified the state treasurer that they intend to comply with the new regulations.  Ibid. Page 495 U. S. 444  And, even if its worst predictions are fulfilled, the military will still be the most favored customer in the State.It is Congress, not this Court, which is best situated to evaluate whether the federal interest in procuring the most inexpensive liquor outweighs the State's legitimate interest in preventing diversion.  Congress has already effected a compromise by excluding beer and wine and the States of Hawaii and Alaska from the 1986 statute.  It may also decide to prohibit labels entirely or prescribe their use on a nationwide basis.  It would be both an unwise and an unwarranted extension of the intergovernmental immunity doctrine for this Court to hold that the burdens associated with the labeling and reporting requirements -- no matter how trivial they may prove to be -- are sufficient to make them unconstitutional.  The judgment of the Court of Appeals is reversed.It is so ordered
U.S. Supreme CourtNorth Dakota v. United States, 495 U.S. 423 (1990)North Dakota v. United StatesNo. 88-926Argued Oct. 31, 1989Decided May 21, 1990495 U.S. 423SyllabusThe United States and North Dakota exercise concurrent jurisdiction over two military bases on which the Department of Defense (DoD) operates clubs and package stores.  In 1986, in order to reduce the price the military pays for alcoholic beverages sold on such bases, Congress passed a statute directing that distilled spirits be "procured from the most competitive source, price and other factors considered."  A DoD regulation also requires that alcohol purchases be made in such a manner as to obtain "the most advantageous contract, price and other considered factors."  Although the regulation promises cooperation with state officials, it denies any obligation to submit to state control or to make purchases from in-state or state-prescribed suppliers.  Since long before 1986, North Dakota has maintained a liquor importation and distribution system, under which, inter alia, out-of-state distillers/suppliers may sell only to state-licensed wholesalers or federal enclaves, while licensed wholesalers may sell to licensed retailers, other licensed wholesalers, and federal enclaves.  One state regulation requires that all persons bringing liquor into the State file monthly reports, and another requires that out-of-state distillers selling directly to a federal enclave affix a label to each individual item indicating that the liquor is for consumption only within the enclave.  After a number of out-of-state distillers and importers informed military officials that they would not deal with, or would increase prices to, the North Dakota bases because of the burden of complying with the two state regulations, the Government filed suit in the District Court seeking declaratory and injunctive relief against the regulations' application to liquor destined for federal enclaves.  The court granted the State's motion for summary judgment, reasoning that there was no conflict between the state and federal regulations because the state regulations did not prevent the Government from obtaining beverages at the "lowest cost."  The Court of Appeals reversed, holding that the state regulations impermissibly made out-of-state distillers less competitive with local wholesalers.Held:  The judgment is reversed.856 F.2d 1107 (CA8 1988), reversed.Justice STEVENS, joined by THE CHIEF JUSTICE, Justice WHITE, and Justice O'CONNOR, concluded that the state regulations are not invalid under the Supremacy Clause.  Pp.  495 U. S. 430-444. Page 495 U. S. 424(a) Under § 2 of the Twenty-first Amendment -- which prohibits the transportation or importation of intoxicating liquor into a State for delivery or use therein in violation of state law -- a State has no power to pass regulations that burden the Federal Government in an area or over a transaction that falls outside the State's jurisdiction, see, e.g., Collins v. Yosemite Park & Curry Co., 304 U. S. 518, but has "virtually complete control" over the importation and sale of liquor and the structure of the liquor distribution system within the State's jurisdiction, see California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., 445 U. S. 97,  445 U. S. 110.  Since North Dakota's labeling and reporting regulations fall within the core of the State's power to regulate distribution under the Twenty-first Amendment, and unquestionably serve a valid state interest in prohibiting the diversion of liquor from military bases into the civilian market, they are supported by a strong presumption of validity, and should not be lightly set aside, see, e.g., Capital Cities Cable, Inc. v. Crisp, 467 U. S. 691,  467 U. S. 714.  Pp.  495 U. S. 430-433.(b) The regulations do not violate the intergovernmental immunity doctrine.  Although they may indirectly affect the Federal Government's liquor costs, they do not regulate the Government directly, since they operate only against suppliers.  See, e.g., Helvering v. Gerhardt, 304 U. S. 405,  304 U. S. 422.  Nor do they discriminate against the Government or those with whom it deals, since the regulatory regime of which they are a part actually favors the Government.  All other liquor retailers in the State are required to purchase from state-licensed wholesalers, whereas the Government alone has the option either to do so or to purchase from out-of-state wholesalers who have complied with the labeling and reporting requirements.  Thus, the regulatory system does not discriminate with regard to the economic burdens that result from it.  See Washington v. United States, 460 U. S. 536,  460 U. S. 544-545.  Pp.  495 U. S. 434-439.(c) Congress has not here spoken with sufficient clarity to preempt North Dakota's attempt to protect its liquor distribution system.  The language of the federal procurement statutes does not expressly preempt the state reporting and labeling regulations or address the problem of unlawful diversion.  The state regulations do not directly prevent the Government from obtaining covered liquor "from the most competitive source, price and other factors considered," but merely raise the price charged by the most competitive source, out-of-state shippers.  Pp.  495 U. S. 439-441.(d) The state reporting and labeling requirements are not preempted by the DoD regulation.  That regulation does not purport to carry a greater preemptive power than the federal statutes.  Nor does the regulation's text purport to preempt any such laws.  Its command to the military to consider various factors in determining "the most advantageous Page 495 U. S. 425 contract, price and other considered factors" cannot be understood to preempt state laws that merely have the incidental effect of raising costs for the military.  Although the regulation does admonish that military cooperation with local authorities should not be construed as admitting an obligation to submit to state control or to buy from in-state or state-prescribed suppliers, the North Dakota regulations do not require such actions.  Pp.  495 U. S. 442-443.(e) The present record does not establish the precise burdens the reporting and labeling laws will impose on the Government, but there is no evidence that they will be substantial.  It is for Congress, not this Court, to decide whether the federal interest in procuring the most inexpensive liquor outweighs the State's legitimate interest in preventing diversion.  It would be an unwise and unwarranted extension of the intergovernmental immunity doctrine for the Court to hold that the burdens associated with the regulations -- no matter how trivial -- are sufficient to make them unconstitutional.  Pp.  495 U. S. 443-444.Justice SCALIA, although agreeing that the availability to the Government of the option of buying liquor from in-state distributors saves the labeling regulation from invalidity, concluded that it does so not because the Government is thereby relieved of the burden of having to pay higher prices than anyone else, but only because that option is not a course of action that the Government has a constitutional right to avoid.  The Twenty-first Amendment is binding on the Government, like everyone else, and empowers North Dakota to require that all liquor sold for use in the State be purchased from a licensed in-state wholesaler.  Since letting the Government choose between purchasing label-free bottles from such wholesalers and purchasing labeled bottles from out-of-state distillers provides the Government with greater, rather than lesser, prerogatives than those enjoyed by other liquor retailers, the labeling requirement does not discriminate against the United States, and thus does not violate any federal immunity.  Pp.  495 U. S. 444-448.Justice BRENNAN, joined by Justice MARSHALL, Justice BLACKMUN, and Justice KENNEDY, agreed that North Dakota's reporting regulation is lawful.  Pp.  495 U. S. 448,  495 U. S. 465, n.10.STEVENS, J., announced the judgment of the Court and delivered an opinion, in which REHNQUIST, C.J., and WHITE and O'CONNOR, JJ., joined.  SCALIA, J., filed an opinion concurring in the judgment, post, p.  495 U. S. 444.  BRENNAN, J., filed an opinion concurring in the judgment in part and dissenting in part, in which MARSHALL, BLACKMUN, and KENNEDY, JJ., joined, post, p.  495 U. S. 448. Page 495 U. S. 426