In a move that could shake up the retail hard liquor retail market in Texas, Wal-Mart filed a lawsuit in an Austin federal court on Thursday, challenging a state law forbidding the company from owning and operating liquor stores in the state.
The nation’s largest retailer and the biggest private employer in Texas is seeking the right to sell hard alcohol at package good stores adjacent to existing Wal-Marts in the state.
Officials at the retail giant said that provisions in the Texas Alcoholic Beverage Code that prohibit Wal-Mart, and other publicly traded companies, from owning or operating package stores in Texas are unconstitutional. The state cannot create a barrier to free market competition and consumer choice, the company said.
The company has issues, too, with another part of the TABC code.
Wal-Mart is also forbidden from owning or holding more than five package store permits.
“Texas law irrationally prohibits companies and persons from owning or holding more than five package store permits. Texas law then unfairly grants an exception to the five-store limit to certain close family members,” the lawsuit says.
Wal-Mart spokesman Lorenzo Lopez said the company is seeking a “fair and level playing field so we can offer our customers a full assortment of adult beverages.”
“This is counter to Texas’ belief in free enterprise and fair competition, limits our customer’s choice and keeps the price of spirits artificially high, all of which harm Texas consumers,” Lopez said in an email.
There was no immediate reaction from package goods stores or the Texas Attorney General’s office.
Wal-Mart already holds licenses to sell beer and wine at 546 locations in Texas, including many in Tarrant County.
It’s been about a decade since Wal-Mart began making a serious move into the hard spirits sales business, teaming with Diageo PLC, the world’s biggest liquor company, to help make the company a big player in the booze business.
Texas is hardly the first place Wal-Mart is having to use its legal clout to break in. Most states still make it illegal or prohibitively impractical for grocery stores to sell liquor.
Local liquor stores in places where Wal-Mart has sought to expand have fought the move, saying it will hurt their businesses.
That debate is playing out this week in Kansas, where a group called “Uncork Kansas” is urging the Legislature there to legalize liquor sales in Wal-Marts and other grocery stores. Wal-Mart and other retailers also are fighting in Indiana this week to end that state’s ban on Sunday carry-out alcohol sales, which also are illegal in Texas.
Staff writer John Gravois contributed to this report, which includes material from The Texas Tribune and the Austin American-Statesman.