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Texas Drinks Retailers Brace For Potential Changes

March 8, 2019

With several controversial topics under debate this year, the Texas wine and spirits retail tier is approaching a crossroads. Sunday retail spirits sales, publicly traded corporate retailers selling spirits, and the elimination of package store ownership limits are all under consideration. On January 25, State Representative Richard Peña Raymond introduced House Bill 1100, which would allow Texas package stores to open on Sundays. On February 6, State Senator Brian Birdwell introduced Senate Bill 645 to remove the five-store limit on package store ownership. And Walmart is continuing its battle in the courts to sell spirits in the state.

Sunday retail spirits sales are a controversial topic in Texas. A number of the state’s liquor store chains and approximately 1,600 single liquor store owners oppose Sunday sales, according to the Texas Package Store Association (TPSA). They argue that Sunday sales will only spread six days’ worth of sales over seven days while increasing overhead costs for retail operators.

However, the Sunday sales measure appears to have bipartisan backing, and supporters of the bill include Total Wine & More, which has 30 stores in Texas. “We listen to our customers and they have repeatedly told us they want the convenience of shopping for beer, wine, and spirits on Sundays,” says Edward Cooper, vice president of public affairs and community relations for the chain.

If Sunday retail spirits sales are adopted in Texas, big box stores may be poised to capitalize, especially considering U.S. District Judge Robert Pitman’s ruling last year in favor of a Walmart lawsuit challenging state restrictions on publicly traded corporations obtaining permits to sell spirits. Pitman ruled that the ban violated the U.S. Constitution’s dormant Commerce Clause and the 14th Amendment guaranteeing equal protection under the law. The TPSA has appealed the ruling.

Texas allows two exceptions to the rule concerning the number of package store permits a person can hold. One exception is if the permits were owned before May 1, 1949, and the other allows a package store owner’s closest blood relative to obtain additional permits and then consolidate them under the owner’s permit. Pitman also ruled that these provisions were unconstitutional and inconsistent with the Equal Protection Clause of the Constitution. Birdwell’s bill, which is opposed by the TPSA and has been defeated in the past, would do away with the limits entirely.—Kevin Barry

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