“Loophole” Families Dominate the Market

Unfair, protectionist retail liquor laws in Texas have limited consumer choice by allowing a small handful of privileged families to dominate the retail liquor market across the state.

Since 1935, Texas code has limited ownership of liquor stores to no more than five permits per individual.

A glaring exception to this five-store restriction is a loophole that allows members of a package store owner’s immediate family (first degree of “consanguinity”) to consolidate permits under a holding company and then acquire an unlimited number of permits. Thanks to this preferential exception, the private chains of a handful of privileged “loophole families” dominate the retail spirits market in communities across Texas.

On March 20, 2018, U.S. District Judge Robert Pitman struck down both the five-store limit and the loophole, finding them in violation of the U.S. Constitution, writing, “The statute does not favor family-owned business; it favors businesses that are owned by certain types of family members.” He went on to conclude, “There is no reason to believe that the exception bears any relation to the promotion of family business or small business or serves an other legitimate state interest.”

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Location“Loophole Family” Marketshare
San Antonio83.2%
Rio Grande Valley79.9%
Dallas75.8%
Austin73.7%
El Paso73.6%
Lubbock68.6%
Fort Worth60.4%
Houston59.7%
Corpus Christi52.1%
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It’s time to end these unfair protectionist laws and loopholes.

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