Texas Senate Votes to Eliminate Anti-Competitive Liquor Law Passage of SB 750 Demonstrates Overwhelming Opposition to Discriminatory Five-Store Limit

AUSTIN – On Monday, April 10, 2017 the Texas Senate overwhelmingly voted to eliminate a discriminatory, anti-competitive provision of the Texas Alcoholic Beverage Code that for generations has provided a loophole granting some families the ability to own an unlimited number of liquor stores, while restricting others to a maximum of five.

“By voting to eliminate this preferential loophole, the Texas Senate has sent a clear message that there is no room in Texas for anti-competitive laws that provide special privileges and protections for a select few based on their family trees. It’s time to stop this discriminatory practice, which has allowed a handful of families to establish virtual liquor store cartels,” said Travis Thomas, a spokesman for Texans for Consumer Freedom (TCF).

Sen. Brian Birdwell (R-Granbury), the sponsor of SB 750, described to his colleagues his intent to “ensure that all Texas businesses are treated equally regardless of their tenure in the market or their familial makeup.”

The loophole embedded in the five-store provision has allowed a handful of families to amass hundreds of liquor stores that dominate regional markets, while being sheltered from competition. 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.

A companion bill, HB 1872, was filed in the Texas House by Rep. Phil King (R-Weatherford) and was referred to the House Committee on Licensing and Administrative Procedures.

TCF also supports the elimination of an anti-competitive and protectionist provision of the Texas Alcoholic Beverage Code that allows privately held companies to own liquor stores while prohibiting publicly traded companies (or private companies with 35 or more shareholders) from doing so. Texas is the only state in the nation with such law. Free market champions Sen. Kelly Hancock (R-North Richland Hills) and Rep. Jason Isaac (R-Dripping Springs) have respectively filed SB 2209 and HB 4233 to eliminate both the five-store rule and the public corporation restriction.

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