Walmart is trying to sell liquor in Texas again.
The retailer says it’s allowed to sell vodka, rum, bourbon and other spirits in 31 states without consideration to whether its shares trade on the New York Stock Exchange.
A Walmart spokeswoman said the company plans to file a lawsuit Tuesday in state district court in Austin challenging as unconstitutional the section of Texas Alcoholic Beverage Code that prohibits publicly traded retailers from owning package liquor stores. Walmart contends Texas law discriminates against it and other companies such as Kroger, Costco and Walgreens in favor of family-owned liquor stores.
“Our customers expect choice and convenience,” said Walmart spokeswoman Lauren Willis. “Walmart is seeking a level playing field that allows us to better serve Texas shoppers.”
The Texas Retailers Association, which represents both big national chains and small locally owned retailers, supports Walmart’s lawsuit, saying it’s the right thing to do for Texas retailers and consumers.
Preventing public companies from owning package liquor stores “is out of step with Texas’ free market values and fair competition,” said George Kelemen, president of the state retail trade group. The state law is “curtailing consumer choice by choosing who gets to compete.”
Texas, Walmart’s biggest market, is the only state that allows private companies to sell spirits, but not publicly traded ones.
The largest U.S. retailer tried once before, in 2015, to change the law with a similar lawsuit. U.S. District Judge Robert Pitman ruled in Walmart’s favor in 2018, but the decision was appealed by the Texas Alcoholic Beverage Commission and the Texas Package Stores Association, which represents Texas liquor retailers, including Houston-based Specs, the state’s largest chain.
The 5th U.S. Circuit Court of Appeals reversed Pitman, saying Walmart had to make a stronger discrimination case. Last November, the U.S. Supreme Court declined to hear the case, but a year earlier the high court invalidated a Tennessee law that required residency to run a liquor store.
The Texas Package Stores Association has argued before the Legislature and in court that a local resident would be more accountable than a company traded on the public stock exchanges. Walmart has said there’s no evidence of that, adding that public companies are concerned with compliance and their reputations.
Besides, hotels, restaurants and bars can serve liquor in Texas if they are owned by publicly traded companies.
Texas has about 2,900 liquor stores; 450 of them are by owned by five chains. Walmart sells beer, wine or both in 588 Walmart and Sam’s Clubs in Texas. San Antonio-based WB Liquors leases space from Costco at two Plano stores and one in Arlington. While the stores aren’t owned by Costco, the WB stores make those locations more convenient for Costco customers wanting liquor.
If Walmart gains approval to apply for package liquor store permits, it said it plans to open liquor stores adjacent to some of its current stores. The liquor stores would have separate entrances and wouldn’t be directly accessible from the main Walmart or Sam’s Club.
There’s been some relaxation of alcohol laws in Texas. Alcoholic drinks-to-go from restaurants and bars were made permanent after the pandemic revealed its popularity with consumers.
The Legislature just made changes to the hours when grocery and convenience stores can sell beer and wine on Sundays. Starting Sept. 1, shoppers can make their purchases beginning at 10 a.m. instead of noon.
A bill allowing liquor store sales on Sunday didn’t pass.