Letter on Texas Alcoholic Beverage Code reform

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The Honorable Kevin Eltife
Chairman, Texas Senate Business and Commerce Committee
Texas State Capitol
Austin, TX 78711

Dear Chairman Eltife:

My name is Josiah Neeley, and I am Texas director of the R Street Institute, a free-market think tank devoted to developing pragmatic solutions to public-policy challenges. I write today to urge you and other members of the Business and Commerce Committee to support S.B. 609.

It’s been more than 80 years since America ended its ill-fated experiment with Prohibition. Yet the Texas Alcoholic Beverage Code is littered with provisions that serve little purpose other than to constrain competition and favor entrenched interests. Current Texas law prohibits publicly traded corporations (other than hotels) from competing in the retail sale of alcoholic spirits, while allowing private corporations to do so. Texas is the only state in the nation to have such a restriction, which serves no purpose other than as an anti-competitive measure.

Similarly, provisions in current law limit the number of package store permits to sell alcoholic spirits that a given individual or entity may own. Yet loopholes in the law for family members and hotels allow certain types of businesses to hold many times the ostensible limit.

These provisions do not advance any state interest in health, safety or welfare. They serve only to limit competition, harming consumers. The provisions are inconsistent with the mission of the TABC, which includes as a goal to “ensure fair competition within the alcoholic beverage industry.” S.B. 609 takes the necessary step of modernizing Texas’ alcohol regulation by removing these anti-free market restrictions from the code.

Sincerely,

Josiah Neeley
R Street Institute

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