WalMart’s fights to sell liquor at its stores in Texas

Wal-Mart’s fight to sell liquor at its stores in Texas looks to be back on track as a federal appeals court is allowing a trade group representing liquor store operations to join a stalled federal lawsuit against the Texas agency that hands out permits to sell booze by the bottle.

liquor bottles

Wal-Mart spokeswoman Anne Hatfield said, “On behalf of our Texas customers, we are prepared to pursue the case to provide Texans their freedom of choice.”

In 2015 bills to loosen liquor license restrictions were introduced in Texas Legislature but never got out of committee. A rule mandating a publicly traded company (such as Wal-Mart) can not hold separate beer and wine and liquor licenses. The rule “is counter to Texas’ belief in free enterprise and fair competition,”  Hatfiled said.

The latest annual numbers available from the State Comptroller’s Office indicates the liquor industry in Texas generated nearly $14 billion in sales in 2014. Wal-Mart with 574 stores, markets and Sam’s Club outlets in Texas, says it’s the state’s largest purveyor of wine and beer.

U.S. District Judge Robert Pitman set the suit for trial next month, but was halted in May because the Texas Package Stores Association (representing approximately 2,500 existing liquor store retailers)  received permission from an appeals court to move forward with challenging Pitman’s refusal to let them intervene in favor of the beverage commission.

Pitman’s ruling was overturned by the 5th U.S. Circuit Court of Appeals last week and let the association join the lawsuit, saying the trade group had a “protectable interest that may be impaired or injured” in the outcome. Pitman now must set a new trial date.

In trying to crack Texas’ restrictions on package liquor licenses, Wal-Mart contends some of the Texas Alcoholic Beverage Commission’s rules indicating unconstitutional discrimination.

A Texas liquor license holder is limited to no more than five package stores. However, a blood relative can acquire other licenses and consolidate those licenses into a single entity that exceeds the limit of five. Wal-Mart is stating it as no “blood relative” to take advantage of the provision.

Wal-Mart said in its lawsuit, “nothing more than naked economic protectionism” when it comes to another idiosyncrasy allowing publicly traded hotel corporations to sell both beer and wine and liquor by the bottle.

A restriction that is not being contested is a ban on liquor sales at grocery stores. Under law, a building with its own entrance is permitted and Wal-Mart says it would accommodate this by dedicating a distinct piece of property at stores to its liquor operation.