TEXAS RETAILERS LEVEL PLAYING FIELD
Texas Gov. Rick Perry signed a bill on Friday barring wine and spirits package stores from shipping to consumers and on-premise accounts anywhere in the state, effective September 1. Under SB 1229, package stores will only be able to deliver in the counties where they are located.
We see this as a protective measure on the side of the package stores to keep the out-of-state retailers from entering Texas. The state is currently facing a lawsuit from the Specialty Wine Retailers Association who claims Texas is in violation of the Interstate Commerce Clause by not allowing out-of-state retailers to ship into the state. The new bill may render the out-of-state retailers lawsuit as moot since in-state package stores can no longer ship across county lines.
In May 2006, the TABC (Texas Alcohol Beverage Commission) agreed to a preliminary injunction that allows out-of-state retailers to ship directly to Texas residents. However, we think there is a good chance the judge will rule in favor of the TABC since the new bill essentially levels the playing field between in-state and out-of-state retailers. If the Commission wins the lawsuit, then the preliminary injunction will no longer be enforced.
As you may remember, Texas is one of three states (including Kansas and South Carolina) in the U.S. that has the unique fourth-tier system. Spirits wholesalers (RNDC and Glazer’s in Texas) are not allowed to deliver directly to on-premise accounts and must go through package stores instead, such as Twin Liquors and Spec’s. There is currently litigation to overthrow that practice, however, and from what we hear things are looking good for the wholesalers.
We see this as a protective measure on the side of the package stores to keep the out-of-state retailers from entering Texas. The state is currently facing a lawsuit from the Specialty Wine Retailers Association who claims Texas is in violation of the Interstate Commerce Clause by not allowing out-of-state retailers to ship into the state. The new bill may render the out-of-state retailers lawsuit as moot since in-state package stores can no longer ship across county lines.
In May 2006, the TABC (Texas Alcohol Beverage Commission) agreed to a preliminary injunction that allows out-of-state retailers to ship directly to Texas residents. However, we think there is a good chance the judge will rule in favor of the TABC since the new bill essentially levels the playing field between in-state and out-of-state retailers. If the Commission wins the lawsuit, then the preliminary injunction will no longer be enforced.
As you may remember, Texas is one of three states (including Kansas and South Carolina) in the U.S. that has the unique fourth-tier system. Spirits wholesalers (RNDC and Glazer’s in Texas) are not allowed to deliver directly to on-premise accounts and must go through package stores instead, such as Twin Liquors and Spec’s. There is currently litigation to overthrow that practice, however, and from what we hear things are looking good for the wholesalers.
posted at 11:51 AM
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