Op-ed: Liquor debate tests Texas’ free-market will

As Texans, we are very proud of our commitment and adherence to free-market principles. Fair competition, a key tenet of free markets, has created an environment in which Texas businesses improve, innovate and thrive. It is what has made the Texas economy the envy of the nation and our business environment the most inviting for entrepreneurs willing to risk capital.

Violating this spirit of free markets, the Texas Alcoholic Beverage Code includes anti-competitive, protectionist provisions that allow the government to pick private industry winners and losers. Texas is the only state in the nation that allows private corporations to own liquor stores while prohibiting publicly traded companies from doing so.

Sen. Kelly Hancock and Rep. Jason Isaac have filed Senate Bill 609 and House Bill 1225 in the 84th legislative session to eliminate this anti-competitive restriction, thereby leveling the playing field and allowing public companies to compete in the retail sale of spirits (not put liquor on grocery store shelves) by obtaining package liquor store licenses, just as private corporations do.

This legislation represents a true litmus test: You either believe in free markets and fair competition or you believe it is the government’s role to restrain trade and artificially increase costs on consumers by deciding who gets to compete.

The lack of competition has enabled large private chains to dominate the Texas liquor store space. For instance, the state’s largest liquor store chain owns and operates 165 stores throughout the state. The state’s second largest chain has 76. In fact, the state’s largest eight chains own at least 420 stores and are growing rapidly. It’s likely that your local liquor store — even those outside a Costco or Sam’s — is a part of one of these massive chains, which operate under different names in different regions.

To suggest that allowing public companies into the market represents competition that would jeopardize “mom and pops” is misleading. The competition already exists for smaller operations, and it heavily favors the conquests of these major private chains, which continue to expand and acquire local stores throughout the state. Furthermore, businesses of every size and industry compete across the state. What makes the retail liquor business worthy of state-mandated protection while all other businesses, large and small, must compete?

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