In a huge decision affecting the craft brewers and the three-tier system at-large, a federal appeals court in San Francisco dealt a blow to Costco Wholesale Corp.’s effort to upend decades-old beer-and-wine distribution laws.
The U.S. Court of Appeals for the Ninth Circuit overturned most of a 2006 district-court ruling that strongly favored the Issaquah, Wash., discount retailer. The case, in which Costco challenged its home state’s distribution laws, has been watched closely industry-wide because it had broad implications that could have reshaped the sales and distribution landscape dramatically.
The appeals court handed a victory to Washington state alcohol regulators, upholding key laws, including a ban on volume discounts and a rule keeping retailers from taking delivery of beer and wine at a central warehouse. The lower court had struck down eight of the nine legal provisions that Costco contested. Six of those eight were upheld in yesterday