With two major pieces of legislation introduced this year, the Texas wine and spirits retail tier is approaching a major crossroads. Sunday retail spirits sales, publicly traded corporate retailers selling spirits, and the elimination of package store ownership limits are on the horizon. On January 25, State Representative Richard Pena Raymond introduced House Bill 1100, which would allow Texas package stores to open on Sundays. On February 6, State Senator Brian Birdwell introduced Senate Bill 645 to remove the five-store limit on package store ownership.
Sunday retail spirits sales are a controversial topic in the Lone Star State. “I’m 50-50 on it,” says John Meadows, owner of two Wiggy’s Wine & Spirits stores in Austin, Texas. “A lot of people say Sunday sales spread six days of sales over seven days. It’s true for the vast majority of retailers in Texas, but it’s not totally true for me. Austin is a big tourist attraction city. There are tons of people that come here, and they’re shocked when they can’t buy a bottle of something on a Sunday.”
Many Texas retailers, however, favor continuation of the law that prevents them from opening on Sunday. While Walmart upped the ante to sell spirits in Texas with a successful lawsuit ruling last summer, the state’s liquor store chains and approximately 1,600 single liquor store owners oppose Sunday sales, according to the Texas Package Store Association (TPSA). The TPSA argues that Sunday liquor sales would negatively impact small businesses because of increased overhead for minimal profits.
The battle over Sunday spirits sales at Texas package stores has percolated for years. This year, however, bill supporters may have the perfect storm to pass it. The measure appears to have bipartisan backing, and supporters of the bill include Total Wine & More, which has 30 stores in Texas. “We listen to our customers and they have repeatedly told us they want the convenience of shopping for beer, wine, and spirits on Sundays,” says Edward Cooper, vice president of public affairs and community relations for the chain.
Moreover, state officials are under pressure to modernize the alcohol industry in the aftermath of the Texas Alcohol Beverage Commission’s (TABC) extensive and unsuccessful enforcement action against Spec’s Wine, Spirits & Finer Foods. Two administrative law judges slammed the TABC in 2017 for stacking charges and failing to prove them. Spec’s sued the TABC last August seeking more than $1 million in damages. The TABC’s top leadership was subsequently replaced and this year faces review under the state’s Sunset Act, a once-a-decade agency analysis.
If Sunday retail spirits sales are adopted in Texas, big box stores may be poised to capitalize, especially considering U.S. District Judge Robert Pitman’s ruling last March in favor of a Walmart lawsuit challenging state restrictions on publicly traded corporations obtaining permits to sell spirits. Pitman ruled that the ban violated the U.S. Constitution’s dormant Commerce Clause and the 14th Amendment guaranteeing equal protection of the law. The TPSA appealed the ruling.
Meanwhile, Texas allows two exceptions to the rule concerning the number of package store permits a person can hold. One exception is if the permits were owned before May 1, 1949, and the other allows a package store owner’s closest blood relative to obtain additional permits and then consolidate them under the owner’s permit. Pitman also ruled that these provisions were unconstitutional and inconsistent with the Equal Protection Clause of the U.S. Constitution.