AUSTIN – On Monday, February 6, Texas State Senator Brian Birdwell (R-Granbury) filed SB 750 to eliminate an 82-year-old, anti-competitive provision of the Texas Alcoholic Beverage Code that for generations has unfairly granted some families the ability to own an unlimited number of liquor stores while restricting others to a maximum of five.
Travis Thomas, a spokesman for Texans for Consumer Freedom (TCF), a consumer education and advocacy organization supporting the elimination of anti-competitive aspects of the Texas Alcoholic Beverage Code, stated, “We commend Senator Birdwell for standing up for fair competition by eliminating a preferential loophole that has given a handful of privileged liquor store owners greater access to the market, sheltered them from competition, and restricted consumer choice.”
Since 1935, the Texas Alcoholic Beverage Code has limited the number of package store permits to no more than five per person. However, a glaring loophole in the law has allowed immediate family members of liquor store owners to consolidate their permits under a holding company and acquire an unlimited number of additional permits.
This loophole has allowed a handful of families to amass hundreds of liquor stores that now dominate regional markets, while being sheltered from competition with small business owners who do not have immediate family members with whom to consolidate their permits. For example, the Rydman family, which owns Spec’s, the state’s largest liquor store chain, has amassed a 163-store empire throughout Texas. Meanwhile, liquor store owners unable to take advantage of this loophole are prohibited from expanding their operations beyond five stores.
Thomas went on to say, “It is shocking and unacceptable that the State of Texas applies a different set of rules for liquor store ownership based on an applicant’s family tree. It is long past time for this Prohibition-era, discriminatory law to be eliminated and for the State of Texas to stop playing favorites. Texas consumers and business owners deserve far better than this affront to free markets and fair competition.”