Rep. Phil King Takes a Stand for Free Markets and Fair Competition Files HB-1872 to Eliminate Loophole Favoring Some Family Businesses Over Others

AUSTIN –On Tuesday, February 14, State Representative Phil King (R-Weatherford) filed HB-1872 to eliminate an anti-competitive, outdated provision of the Texas Alcoholic Beverage Code (TABC) that for generations has unfairly granted some families the ability to own an unlimited number of liquor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.

“Texans for Consumer Freedom (TCF) commends Representative King 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,” said Travis Thomas, spokesman for TCF.

The Texas Alcoholic Beverage Code limits 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.

In other words, Texas treats liquor store ownership rights differently, depending on an applicant’s family tree. Those who do not have family members with whom to consolidate their permits are not allowed to expand beyond five stores. Those who do may expand without limit. This is how the families who own liquor store chains such as Spec’s (163 stores), Twin Liquors (80 stores), Western Beverage (63 stores), and Gabriel’s (49 stores) have amassed hundreds of liquor stores that dominate regional markets.

Thomas went on to say, “It is unacceptable that for generations the State of Texas has provided some families greater access to the market than others. Loophole families control 83 percent of the San Antonio retail liquor market, 80 percent of the Rio Grande Valley market, 76 percent of the Dallas market, and 74 percent of the  Austin market.  This unjust law must be eliminated to allow for fair competition in Texas.”

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