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Total Wine Appeals To U.S. Supreme Court In Connecticut Minimum Pricing Case

December 6, 2019

Total Wine & More is looking to take its battle against Connecticut’s minimum pricing rules to the U.S. Supreme Court. In an appeal filed December 3, Total presses its case that Connecticut’s minimum pricing system violates federal anti-trust laws aimed at promoting competition.

In Connecticut, drinks wholesalers must post their prices in advance so that competing wholesalers can match them, hold those prices for a month, and may not offer volume discounts to retailers. This provision prevents larger businesses, like Total Wine & More, from using their size and scale to the advantage of the company and consumers, according to the retailer.

“Wholesalers in this scheme determine not only the case prices paid by retailers, but also the minimum bottle prices paid by consumers,” Total’s petition reads. “By design, this scheme mimics the results of an illegal price-fixing conspiracy while enabling the cartel’s participants to avoid any explicit ‘agreement.’”

Connecticut’s smaller retailers have countered that dismantling the current regulations would destroy small businesses that can’t take advantage of volume discounts, put employees out of work, and cost the state substantial tax revenue.

Earlier this year, a three-judge panel affirmed an earlier dismissal of Total’s lawsuit by a lower court. Writing for the panel, U.S. Circuit Judge Paul Engelmayer said the Connecticut minimum pricing law is not preempted by federal anti-trust laws. Total then petitioned for a rehearing of the case before the entire circuit court, but was denied.

However, four of the circuit court’s judges dissented to the latter move, stating, “the decision below ‘perpetuate[s] a longstanding circuit split’ and ‘allow[s] de facto state-sanctioned cartels’ to inflict ‘artificially high prices on consumers and retailers across all three states in our Circuit.’”

It’s not the first time this year that Total has looked to the Supreme Court to challenge a state law. Over the summer, it won a victory when the high court struck down Tennessee’s residency requirement for beverage alcohol licensing in a 7-2 decision. That closely watched case also opened the door to new challenges to state laws prohibiting direct shipping from out-of-state retailers.—Daniel Marsteller

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