TEXAS SENATE VOTES TO ELIMINATE LIQUOR LICENSE LOOPHOLE

Source: Wine & Spirits Daily

April 12, 2017

On Monday the Texas Senate voted to eliminate a provision in the Texas Alcoholic Beverage Code that allows certain licensees to own an unlimited number of liquor stores, while others are restricted to five. You may recall, Wal-mart has been battling in court with the Texas Alcoholic Beverage Commission (TABC) over that very issue.

The issue is that the TABC code allows consolidation of package store permits into a single entity if one or two relatives have a majority of the ownership in two or more venues with package store permits, such as Spec’s and Gabriel’s. The bill’s sponsor, Sen. Brian Birdwell, says his intent is to “ensure that all Texas businesses are treated equally regardless of their tenure in the market or their familial makeup.”

“By voting to eliminate this preferential loophole, the Texas Senate has sent a clear message that there is no room in Texas for anti-competitive laws that provide special privileges and protections for a select few based on their family trees. It’s time to stop this discriminatory practice, which has allowed a handful of families to establish virtual liquor store cartels,” says Travis Thomas, spokesman for Texans for Consumer Freedom.

WHAT ABOUT WAL-MART’S CASE? Wal-mart has been fighting to add spirits to the shelves of its 546 stores in Texas since 2015. As a result, Wal-mart is locked in a legal fight with the TABC because the code prevents a public corporation from holding a package store permit and limits the number of package store permits to five for most companies.

Meanwhile, two other bills were introduced last month to eliminate both the block on public companies from having a liquor license and the five license cap [see WSD 03-14-2017]. It seems Texas lawmakers are taking Wal-mart’s side.