A blow to three-tiers. 7th Circuit sides with expansion of Granholm – allowing lawsuit challenging Illinois’s ban on direct shipping of liquor, beer, and spirits from out-of-state retailers.

“The Amendment gives states the power to structure their liquor distribution systems; it does not give states that adopt one structure over another outsized deference.” Judge Wood writing in Lebamoff v. Rauner regarding the function of the Twenty-First Amendment and its intersection with the three-tiered system.

In Bourbon Empire, Reid Mitenbulerpointed out that the three-tiered system was a…

Federal Court finds merit in argument against advertising laws meant to promote three-tiered system; allowing distillers, wineries, and breweries to operate tap rooms or sell at retail on their premises wholly abandons the argument that statute prohibits commingling between three-tiered system.

There’s an interesting bit in Richard Branson’s autobiography, “Losing my Virginity”where he discusses how he obtained the purchase money to buy the nightclub Heaven – needing to put very little money down – because the brewery providing drinks to the club provided the financing in exchange for selling their beer (one assumes some form of exclusivity was at play). A true tied-house arrangement.…

3-tiers crumbling? Michigan forced to allow out-of-state wine retailers to ship direct; avoiding Michigan’s 3-tier system.

  The slow dismantling of protectionist state statutes prohibiting interstate shipment of alcohol advances. The marathon started by Granholm has led to a host of cases demanding parity under commerce clause principles between in-state and out-of-state retailers. As we reported last week, one of those, a 6th Circuit challenge, will be heard in the Supreme Court this term.

  Then, just this past…

Wisconsin SC finds “good cause” isn’t required to terminate wine distribution agreements

The Governor of Wisconsin has a partial veto power that comes from the state constitution which allows for striking portions of bills to create entirely new (and even contrary) legislation from a bill that’s presented. (Wisconsin Cons. Article V, Section 10). Apparently this power was used to such effect that in 1990 the State Constitution was amended to curb the practice of striking individual…

7th Circuit: Indiana’s Wacky Prohibition of Distributors Selling Both Beer and Spirits Has Rational Basis: Increased Cost to Consumers

You might not believe it unless you look like this: But Indiana’s current bar against beer wholesalers selling liquor or liquor wholesalers selling beer was just held constitutional because the state claims its “rational basis” was the increase of pricing to stem alcohol consumption. In Monarch Beverage Co., Inc. v. David Cook et al., Monarch Beverage, a scrappy beer distributor responsible for…

Dissent In Texas Three-Tier Case Contains Powerful Indictment Of Strict Enforcement Of Cross-Tier Ownership

As you all probably have heard, in Cadena Commercial v. Texas Alcoholic Beverage Commission, the Texas Supreme Court recently weighed in on the Texas Alcoholic Beverage Commission’s decision to deny a license for retail sales to a group of convenience stores that wanted to sell alcohol because through a chain of ownership, one of the entities that owns companies that own the convenience stores…