Walmart sues TABC for the right to have a liquor license

Walmart files lawsuit against TABC to get a liquor license.
Walmart files lawsuit against TABC to get a liquor license.
Published: Jun. 29, 2021 at 5:36 PM CDT|Updated: Jun. 30, 2021 at 7:05 AM CDT
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TEXAS (KCBD) - Walmart has filed a lawsuit against Texas asking for the right to get a liquor license. The Texas Alcoholic Beverage Commission bans corporate entities from getting a package store permit. This ban does not include the corporate entities which were grandfathered in back in the 1990s.

“Texas is the only state in the nation that allows private corporations to compete in the retail sale of spirits while prohibiting publicly traded companies from doing so,” said Walmart officials in a news release.

Walmart helps people save money and live better by purchasing quality products at competitive prices in retail stores throughout Texas, the United States, and other parts of the world. Each week, more than 245 million people shop at Walmart’s more than 11,400 stores in 24 different countries. Walmart is the largest private employer in the United States and in the State of Texas, employing more than 172,500 individuals in Texas and collaborating with almost 3,600 suppliers that in turn employ more than 281,000 individuals in Texas. Walmart is the largest retailer of wine and beer in Texas, responsibly selling wine and beer to millions of Texans. Each of its “Walmart” and “Sam’s Club” stores that sell wine and beer do so only after first obtaining an appropriate permit from the Texas Alcoholic Beverage Commission.

Walmart vs. TABC lawsuit

That law was intended to protect small business owners. Court records show Walmart already has concrete plans to sell liquor in its stores, but it can’t get the license.

“From 1935, when the State of Texas reauthorized retail sales of alcohol following the end of Prohibition, until 1995, no person could obtain a permit for retail sale of distilled spirits in Texas unless that person had been a resident of Texas,” the lawsuit reads. “This durational-residency requirement, along with other provisions restricting who may own a permit and how many they may own, served to insulate incumbent package store owners from competition. Those in-state residents privileged to hold a package-store permit faced no volume restrictions on how much liquor they could sell and low excise taxes on retail liquor sales.”

Attorneys for Walmart say it has served its purpose too well, calling it anti-competitive and unfair.

According to Walmart Global Communications Director Lauren Willis, “Our Texas customers expect choice and convenience from their shopping experiences. Texas law arbitrarily and unfairly prohibits publicly owned businesses like Walmart from owning package liquor stores, preventing us from participating in the retail sale of spirits. Walmart is seeking a level playing field that allows us to better serve Texas shoppers.”

The lawsuit is supported by the state’s largest retail trade group. George Kelemen, President of the Texas Retailers Association said, “A level playing field provides the foundation of a successful retail sector. The Texas Retailers Association represents small neighborhood stores and large retail chains across the state who agree that the protectionist law that arbitrarily prohibits publicly traded companies from owning package liquor stores is out of step with Texas free market values and fair competition.”

He went on to say, “State laws should not be curtailing consumer choice by choosing who gets to compete. Walmart’s challenge of this anti-competitive law is the right thing to do for Texas retailers and Texas consumers.”

The Texas Conservative Coalition Research Institute, a think tank dedicated to the principles of limited government and free enterprise also expressed its support.

“Competition is good for consumers, no matter what the industry. For the state of Texas to prohibit companies from owning package liquor stores simply because they are publicly traded is inconsistent with Texas free market values of fair competition and consumer choice. The state of Texas should be encouraging competition, not preventing it,” said TCCRI President, Mia McCord.

Were Walmart to prevail in court, all TABC safety requirements, day and time restrictions, age restrictions and store design requirements would be followed and enforced. Walmart abides by similar requirements in the 31 other states where it currently sells spirits at retail package stores

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