Why Can’T Walmart Sell Liquor In Texas?

Texas Alcoholic Beverage code allows only privately owned retailers to sell liquor in the state. Publicly traded retailers such as Walmart, Costco, Walgreens and Kroger are excluded from doing so in Texas. (File Photo / Denton Record-Chronicle )

Publicly traded retailers want to sell spirits just like publicly traded hotels, restaurants and bars can serve alcohol in the Lone Star State. Texas Alcoholic Beverage code allows only privately owned retailers to sell liquor in the state. Publicly traded retailers such as Walmart, Costco, Walgreens and Kroger are excluded from doing so in Texas.

The U.S. Supreme Court denied a bid from the retail giant to start stocking liquor in the Lone Star State. Walmart Inc. argued that the 1995 state law banning liquor sales by publicly owned companies is discriminatory to out-of-state retailers, Bloomberg’s Greg Stohr reports.

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.”

Why did Walmart sue Texas?

Walmart sued Texas in federal court in 2015, arguing that the code was discriminatory and violated the Commerce Clause. A federal judge in Austin sided with Walmart in 2018, but the Texas Alcoholic Beverage Commission appealed that decision before the U.S. Fifth Circuit Court of Appeals, which largely ruled in the state’s favor.

Walmart filed suit in an Austin state district court Tuesday in the hopes of overturning the code and allowing liquor sales at its 588 Walmart and Sam’s Club locations statewide. The suit argues that the Texas Beverage Code gives other businesses preferential treatment.

Walmart is not ready to give up on liquor sales in Texas. The world’s largest retailer can sell beer and wine at its Texas stores, but it can’t sell liquor under state law. Walmart’s attempts to argue before federal courts that the state’s code on alcohol sales is unconstitutional have failed, so it will now take that matter before Texas courts.