Major Three-Tier Decision in Texas
Judge allows out-of-state shipments; but ruling supports wholesalers
In a major decision affecting the very basis of the three-tier system, Judge Sidney Fitzwater of the U.S. District Court of Northern Texas ruled yesterday that allows out-of-state retailers to ship beer and wine directly to consumers. The catch is, out-of-state retailers must purchase only from Texas-licensed wholesalers, making the decision a major victory for wholesalers and three-tier advocates.
The decision, which suggests in the ruling that wholesalers are an imperative component to alcoholic beverage regulation, is a benefit to craft and specialty brands, who rely on a diverse and abundant wholesale network to get brands to retail.
Although hailed as a victory by both sides, if the ruling stands that out-of-state retailers must first buy the brands from a licensed wholesaler within the state of Texas before shipping directly to the consumer, this would imply a solid affirmation of wholesalers rights, providing strong legal ground for distributors in future cases legal challenges.
How would this new ruling work in the real world. It may free up shipment into the state but only by the tiniest of degrees. If a retailer has to purchase it from a licensed distributor in Texas then I don't see how that product could then shipped without the retailer having a physical presence in the state. I can't imagine a distributor being willing to take on the packaging and shipping responsibilities for an out of state retailer.
With the very anemic shipping numbers for retailers and manufacturers in the US I can't see how this ruling will change things on the ground in Texas.