AUSTIN – On Friday, March 10, 2017, Senator Kelly Hancock (R-North Richland Hills) and Representative Jason Isaac (R-Dripping Springs) filed SB 2209 and HB 4233 to eliminate two anti-competitive provisions of the Texas Alcoholic Beverage Code on behalf of Texas consumers.
Texans for Consumer Freedom (TCF), a consumer education and advocacy organization supporting the elimination of anti-competitive aspects of the Texas Alcoholic Beverage Code, commends Senator Hancock and Representative Isaac for leading the fight for free markets and fair competition by leveling the playing field for the retail sale of spirits.
“Texans for Consumer Freedom applauds Senator Hancock and Representative Isaac for introducing legislation that stands up for free market principles an eliminates preferential loopholes,” said TCF spokesman Travis Thomas. “Texas is the only state in the nation that allows private corporations to compete in the retail sale of spirits while prohibiting publicly traded companies (or private companies with 35 or more shareholders) from doing so. We agree that it’s time to level the playing field.”
The bills also seek to eliminate an anti-competitive provision of the code which restricts liquor store ownership to no more than five. A loophole in the law unfairly allows immediate family members of liquor store owners to consolidate their permits under a holding company and acquire an unlimited number of 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, not only with publicly traded companies, but also 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.
Based on an evaluation of the state’s liquor store market, because of the combination of these two anti-competitive provisions of the Texas Alcoholic Beverage Code, a handful of “loophole families” now 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.
“Due to these discriminatory, protectionist laws, a handful of privileged families have established virtual cartels that control the state’s retail liquor market,” Thomas went on to say. “Not only has the state sheltered them from competition with public companies, they’re protected from competition with other private companies simply based on their family tree. It’s time for the government to stop playing favorites and stand up for fair competition.”
Texans for Consumer Freedom is a registered 501(c)(6) education and advocacy organization of retailers, consumers, and free market advocates committed to eliminating anti-competitive aspects of the Texas Alcoholic Beverage Code and standing up for fair competition in the retail sale of spirits. For more information, visit www.TexansForConsumerFreedom.com.