Arkansas’ alcoholic beverage industry rules cited for manufacturing fairness
by June 30, 2016 5:56 pm 172 views
Arkansas’ three-tier system for regulating the alcoholic beverage industry was cited as a standard in fairness for manufacturers, distributors and retailers in a recent statement from the Texas Association of Business.
The group is fighting a “One Share Rule” established by the Texas Alcoholic Beverage Commission (TABC) that it says is administered “arbitrarily.” The hope is to apply the Texas Alcoholic Beverage Code “in a fair, consistent and legal manner,” the group said in a press release.
The One Share Rule is part of Texas’ own three-tier system that states manufacturers, distributors and retailers are to operate independently, prohibiting the control or influence among tiers. TABC asserts that “even one overlapping share of stock ownership across tiers, whether direct or indirect, violates its interpretation of the law,” the group explained, adding that the problem is the rule is selectively enforced with over 40 manufacturers, distributors and retailers with overlapping ownership having more than 2,500 permits approved or renewed by the TABC during the last year.
The Texas Association of Business filed suit after a convenience store in South Texas and a Texas-based food and beverage distribution company had their permits denied under the same circumstances.
“The TABC’s application of Texas alcohol law defies common sense as the majority of alcohol manufacturers, retailers and distributors have some over-lapping ownership with businesses in other tiers,” said Bill Hammond, CEO of the Texas Association of Business. “The TABC is arbitrarily picking winners and losers, and that is simply not how we operate in Texas.”
Hammond said Arkansas, Kansas, Kentucky, Maryland, New York and Michigan were among states that got it right, prohibiting companies from having interests across more than one tier “only if they control or influence the activities of businesses in more than one tier.”
Through the lawsuit, the Texas Association of Business is pushing for the TABC to abandon the One Share Rule, and begin enforcing the three-tier system “in a fair, consistent and legal manner,” similar to Arkansas and the other states mentioned.