USA: Texas remains in control of alcohol distribution

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The following was released on Friday (10th November)today by Licensed Beverage Distributors:

Texas' right to ensure the responsible distribution of alcoholic beverages was further solidified this week by the Seventh Circuit Court of Appeals in Chicago, which refused to reconsider its decision to prohibit the unlicensed direct shipment of alcohol from Internet companies to customers

On November 6, the court refused a Petition for Rehearing and Petition for Rehearing Enbanc filed by the plaintiffs in Bridenbaugh, et al. v. Karen Freeman-Wilson, Attorney General of Indiana.

Previously, on September 14, the Seventh Circuit overturned a lower court opinion, ruling instead that the Commerce Clause of the 21st Amendment does not bar states from regulating imports of wine, liquor, and beer. Rather, states have full authority under the 21st Amendment to the Constitution to control beverage alcohol sales distribution and importation into each state.

"We take our responsibility of delivering alcohol to Texans seriously and support the Seventh Circuit decision as Internet companies should not be allowed to work outside of the regulatory safeguards we have established in this state as part of the three-tier distribution system," said Robert Sparks, Executive Director of the Licensed Beverage Distributors, an Austin-based association representing Texas-based wholesalers.

Texas is involved in a similar lawsuit to define the state's rights of alcohol distribution. For the last nine months, the state has been waiting for a ruling from U.S. District Judge Melinda Harmon in Houston who has been reviewing a challenge to the Constitution's Commerce Clause. Other states reviewing similar cases include New York, Virginia, Florida, North Carolina, and Michigan.

Support for state's rights to regulate alcohol has been overwhelming. Last month, President Clinton signed a similar law known as the 21st Amendment Enforcement Act that will give states more authority to enforce their laws against illegal shipments of alcoholic beverages from out-of-state companies. The law permits any Attorney General to file an action in federal court for an injunction to stop illegal shipments if there is reasonable cause to believe that state laws regulating the importation and transportation of alcohol are being violated.

This is important as prior to this federal law, Texas could not prosecute out of state companies that broke Texas law by shipping directly to customers -- which meant there was no responsibility or accountability if these companies sold alcohol to minors or people within dry areas or did not collect tax revenues.

"Out-of-state companies should not be able to blatantly break Texas law by selling alcohol without preventing minors from ordering, without paying taxes, and without honoring local dry county areas," added Sparks.

The new federal law will not prevent wineries or online marketers from filling consumer orders as long as they follow the state's laws by working through the three-tier system, which will ensure accountability. This should address concerns Texans were found to have in a recent statewide poll that they want the current safeguards to remain in place with the advent of new mediums like the Internet.

Over 77 percent of Texas voters support distribution of alcohol through the three-tier system and greatly oppose the sale of wine (65%), beer (74%), and liquor (76%) over the Internet. In a similar survey conducted by the Americans for Responsible Alcohol Access, more than 80 percent of college students under the age of 21 said they would consider ordering alcohol online to avoid state age restrictions.

"If Moms and Dads knew how easy it was for their children to order alcohol over the Internet, they would be shocked," added Sparks. "We have real concerns that this unregulated medium might cause more underage drinking in Texas."

The Licensed Beverage Distributors recently helped launch the Texas Safety Network (, a Web site formed to create a public forum for issues related to Texas' three-tier safeguard system. The Texas Safety Network supports safeguards including: protecting the control of alcohol sales in dry counties, collecting taxes from the sale of alcohol, and, most importantly, ensuring that minors are not able to buy alcohol over the Internet.

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