Anti-Competitive TABC Laws Allow Market Share Domination by Private Chains Economic Analysis Underscores the Need to Eliminate Protectionist Laws

AUSTIN – On the same day the Texas Senate Committee on Business and Commerce heard SB 609, a bill that would eliminate anti-competitive provisions of the Texas Alcoholic Beverage Code, Texans for Consumer Freedom released the results of an economic study highlighting the market dominance of private liquor store chains.

Jon Hockenyos, President of economic research firm, TXP, shared results from an analysis of chain liquor stores’ market share in communities across the state. Based on the value of business personal property reported by package liquor stores to county appraisal districts, the results revealed how select chains have flourished under laws and loopholes designed to restrict competition.

According to Hockenyos, “The market share of the private liquor store chains dwarfs that of local operators. For example, the two largest private chains in the Austin area account for more than 70 percent of local market share. In the Greater Houston area, one chain represents more than half the market, and that same chain accounts for just less than 80 percent of the Rio Grande Valley. This pattern is repeated to varying degrees across all major metropolitan areas of the state.”

Hockenyos went on to say, “There is an understandable concern that local ‘mom and pops’ would not be able to compete if the legislature were to eliminate the law prohibiting public companies from owning liquor stores. These numbers clearly demonstrate that mom and pops have faced this kind of competition for many years and are still able to serve their customers. There is no reason to restrict additional market entrants.”

“It’s time to stop and ask: Who is taking a stand against free markets and fair competition and why?” said Travis Thomas, spokesman for Texans for Consumer Freedom. “The state’s largest liquor retailer operates more than 160 stores under 14 different names and controls an enormous amount of market share in communities throughout the state under a protectionist law that shelters them from competition.”

Thomas went on to say, “This bill is about removing the protectionist measures that preserve the dominance of chain stores. The state should not be picking winners and losers, and we encourage the legislature to eliminate these anti-competitive laws in order to level the playing field for the Texas consumer.”

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