US: Texas studies Southern distribution lawsuit

The Texas Alcoholic Beverage Commission has begun studying a lawsuit from Southern Wine & Spirits that claims the company is being stopped from entering the state's liquor market.

Southern has filed a suit seeking to block the commission from enforcing a provision in the state's code that controls who wins a permit to sell or distribute alcohol in Texas.

Florida-based Southern is the largest distributor of wine and spirits in the US and is keen to enter the Texas market.

The suit comes just four months after Southern said it was in talks to buy Texas-based Glazer's, one of the leading beverage alcohol distributors in the US.

The Texas state code on winning a licence requires that 51% of the company's shareholders live in the state for at least a year before the permit is granted. The owners of Southern live in Florida and are understood to be unwilling to live in Texas.

Lou Bright, the commission's general counsel, told just-drinks today (13 September) that the provision dates to the end of Prohibtion.

Then, Bright said, commissioners thought it important that those who sold alcohol be based in the state in order to for "judgements to be made on their behaviour and capabilities before giving them liquor licences".

He said: "One of the founding purposes of (the code) was to segregate criminal elements from the alcohol beverage business and we've been very successful at doing that in the last 70 years."

Bright refused to comment on whether he believed the provision was just a vestige of another era and insisted it was the commission's job to enforce laws passed by the Texas state legislature.

He added: "We intend to get a legal resolution of the questions presented by Southern in the most expeditious way possible."

Southern officials and lawyers representing the company could not be reached for comment as just-drinks went to press.