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Texas Voters Opt To Expand Liquor Sales

May 18, 2012

Texas, the second-largest U.S. drinks market despite more than 20 dry counties within its borders, continues to liberalize its liquor sales laws in a big way. In results updated Wednesday, Texas voters passed 13 ballot initiatives to allow and/or extend alcohol sales in 11 previously dry or damp Texas cities. The vote represented a 100% passage rate for alcohol initiatives on the ballot.

The 13 ballot initiatives covered the 11 cities of Bartonville, Kyle, Muenster, Hudson Oaks, Rusk, Pantego, Mineral Wells, Heath, Knox City, Ferris and Saginaw. (Two cities, Ferris and Saginaw, each had two separate alcohol initiatives covering the on- and off-premise, bringing the total number of initiatives to 13.)

Kyle, Muenster and Hudson Oaks voted to liberalize alcohol sales in all forms. Bartonville, Rusk, Pantego and Mineral Wells voted to allow sales of all alcohol types in the off-premise only, while Heath and Knox City voted to allow beer and wine sales in the off-premise only. Ferris and Saginaw both voted to allow beer and wine sales in the off-premise and all alcohol for restaurants.

The vote means that municipalities like Knox City (population 1,200) will now be able to legally sell beer and wine for the first time since Prohibition, as well as extend all beverage alcohol sales to newly annexed areas of “wet” cities such as Cooke County’s city of Muenster.

Many Texas beverage alcohol laws are consistent statewide, but the state’s Alcoholic Beverage Code allows citizens to determine what types of beverages may be sold and where. Local option elections set liquor sales policy for counties, cities and even specific precincts.

Texas currently has 46 completely wet counties (allowing sales of beer, wine and spirits on-premise and off) and 22 completely dry counties, where no alcohol sales are allowed. The remaining 186 are “damp”—where some alcohol sales are permitted, with limitations. New state laws passed in 2003 and 2005 have made it easier for pro-alcohol initiatives to get on the ballot in Texas, and that has brought a surge in statewide local option elections.

According to the Texas Alcoholic Beverage Commission, there were some 545 elections attempting to legalize beverage alcohol sales in some form between 2004 and 2011, with a success rate of 77%. During that same period, only two communities have voted to prohibit the sale of alcoholic beverages. “The trend is definitely toward wet or damp,” says Carolyn Beck, director of communications and government relations for the Texas Alcoholic Beverage Commission. “The state is much more wet than it used to be.”

Does liberalizing the law boost volume? Yes and no. “In the case of small precincts and counties, the effect is that it spreads the business out from the ‘last stop’ store in a wet county to the business in a new area,” says Louis Zweig, senior vice president, marketing and strategy at Glazer’s. “In the case of North Dallas, which is now “damp” (wine/beer only), there has been a small increase in overall volume. But the real effect seems to be a spreading out of the business.”

“Any time you can have 100% passage, that’s surprising,” says John Hatch, a partner at Texas Petition Strategies, a political campaigning firm that specializes in local option elections and worked on behalf of elections in Kyle and Rusk. “But I think it speaks to the fact that communities are wanting to keep their tax dollars local, especially in this economy.”

Elections handled by Hatch’s company are funded by major national and regional retailers such as Walmart, Brookshires Grocery Company, Kroger, Albertsons and 7-Eleven, restaurant chains such as Outback and Applebee’s, Chambers of Commerce, local developers and private citizens.


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