Walmart has won its legal challenge to add liquor stores adjacent to some of its Texas locations, a decision that will overrule current Texas liquor laws.
Permits for liquor stores go only to Texas residents under the state's current alcoholic beverage code. The Texas Package Store Association, which represents liquor stores, has argued a mega-retailer like Walmart selling spirits — in addition to beer and wine — could push mom-and-pop stores out of business.
U.S. District Judge Robert Pittman rejected that claim, writing in a 50-page order issued Tuesday that Walmart holds between 22% and 40% of the package store permits in markets where Walmart competes with local liquor stores. Many of the so-called family-owned liquor stores are now large chains with dozens of locations, giving locally owned businesses a clear advantage, Pittman wrote.
Walmart initially waged a public relations campaign, then a legal battle to add separate liquor stores alongside its current locations. Pittman struck down enforcement of sections of the Texas liquor law, saying it violated the U.S. Constitution's commerce clause.
According to a legal definition out of Cornell Law School, the commerce clause prohibits a state from passing laws that excessively burden interstate commerce. Pittman said amendments to the Texas liquor code were passed in 1993 to specifically discriminate against out-of-town retailers.
The Texas Package Store Association intends to appeal, issuing a statement that Texas liquor laws have worked for 80 years and that TPSA would continue to fight for family-owned liquor stores.
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