Major Three-Tier Decision in Texas
Jan 16, 2008 - In a major decision affecting the very basis of the three-tier system, Judge Sidney Fitzwater of the U.S. District Court of Northern Texas ruled yesterday that allows out-of-state retailers to ship beer and wine directly to consumers. The catch is, out-of-state retailers must purchase only from Texas-licensed wholesalers, making the decision a major victory for wholesalers and three-tier advocates.
The decision, which suggests in the ruling that wholesalers are an imperative component to alcoholic beverage regulation, is a benefit to craft and specialty brands, who rely on a diverse and abundant wholesale network to get brands to retail.
Although hailed as a victory by both sides, if the ruling stands that out-of-state retailers must first buy the brands from a licensed wholesaler within the state of Texas before shipping directly to the consumer, this would imply a solid affirmation of wholesalers rights, providing strong legal ground for distributors in future cases legal challenges.