Dive Brief:
- Wal-Mart Stores Inc. is suing the Texas Alcoholic Beverage Commission, alleging the unconstitutional nature of its legal limits on hard liquor sales.
- The company is also teaming up with other retailers to support legislation that would override the decades-old laws.
- According to one law, public companies with more than 35 shareholders cannot sell spirits. Also, no single company can own more than five liquor stores unless the permits for additional stores are purchased from a blood relative.
Dive Insight:
These laws have been in place for many years and protect smaller private liquor companies while limiting the activities of larger public companies. Larger retailers like Wal-Mart, Kroger Co., Costco Wholesale Corp., and others are doing what they can to thwart these rules. Texas is the only U.S. state to have a law that allows private companies to own liquor stores while prohibiting public companies from doing the same, according to a communications consulting firm principal the retailers employed.
Because Texas is Wal-Mart's largest market in terms of number of stores, overturning these laws would be a huge win for the company. It would enable Wal-Mart to carry out its plans to open standalone liquor stores adjacent to its locations, which is crucial, as spirits can't be for sale in the same retailer as groceries, under Texas law.