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Texas senator pushes to abolish liquor store ownership limits

A state senator is trying again to reform liquor laws that he argues are anti-competitive and protectionist.

Sen. Brian Birdwell R-Grandbury speaks during a March 16th, 2015 Senate Subcommittee on border security

Sen. Brian Birdwell is unsure of how many times his package store bill has been introduced to the legislature, but he knows it’s been at least five times — three of them by other senators before he picked up the issue.

The Senate Business & Commerce Committee voted 5-0 Thursday to report SB 750 to the full Senate. The bill, similar to one filed by Sen. Kelly Hancock, eliminates two Alcoholic Beverage Code provisions that critics say maintain an unlevel playing field for liquor businesses.

Right now, the Alcoholic Beverage Code limits individuals to five package store permits, which allow permit holders to buy and sell liquor. There are two exceptions: the rule of consanguinity allows immediate family — parents, siblings or children — to pool their package store permits together into a single legal entity, and then they can obtain an unlimited number of permits. Businesses established before 1949 are also exempt from liquor store ownership limits.

Birdwell, who introduced SB 750, said this is the only place in Texas law where familial ties are relevant.

“The Alcoholic Beverage Code is a compilation and hodgepodge of various laws that have been pasted together since  Prohibition has been repealed,” Birdwell said. “There may have been legitimate reason in the 1940s, 1950s [for the rule of consanguinity]. But now it’s being used for the large [liquor] chains to grow and grow and grow.”

This is not the first time Birdwell has advocated allowing liquor store owners to own as many stores as they want to. He introduced an identical bill last session, where it passed the Senate but died in the House.

Dale Szyndrowski, a vice president of the Distilled Spirits Council of the United States, was the only person to testify on Tuesday and said parts of the code Birdwell and Hancock are targeting have outlived their usefulness.

Szyndrowski said the growth of the state's population compared with the growth of liquor stores shows the law's impact. In 1933, Texas had 6 million people and 2,550 package stores. Today, the state has nearly 27 million people and 2,564 package stores.

“The government should not be in the business of picking winners and losers,” Szyndrowski added. “Instead, it should seek to level the playing field for all competitors ... We should either have a cap that applies to everyone or a cap that applies to no one.”

A representative for the Texas Package Stores Association registered his opposition to the bill, and the association distributed flyers to committee members asking them to vote against SB 750, citing the five-store limit as a reason why Texas has ranked among states with the lowest liquor consumption for the past 40 years.

Birdwell said he has a problem with how the current law suppresses the free market.

"There’s no way a small chain of five or less can compete with multiple dozens of stores and their buying capacity,” he said.

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85th Legislative Session Texas Alcoholic Beverage Commission