ALCOHOL LAW ADVISOR
ALCOHOL LAW ADVISOR
Regulatory and Distribution Law Updates for the Alcohol Industry
ALCOHOL LAW ADVISOR
Regulatory and Distribution Law Updates for the Alcohol Industry
TABC
Subscribe to TABC's Posts

Federal District Court Rejects Craft Brewers’ Equal Protection and Due Process Challenge of Texas’ Ban on Brewer Off-Premises Retailing

On March 20, 2018, a federal district court in Texas issued an opinion in Deep Ellum Brewing, LLC, et al. v. Texas Alcoholic Beverage Commission. The court delivered a blow to Texas craft brewers, upholding Texas’ prohibition on sales of beer by brewers to consumers for off-premises consumption. Texas authorizes the manufacture and sale of beer by persons holding a: (1) brewer’s permit (allowing the production of beer of more than 4% alcohol by weight (ABW)); (2) manufacturer’s license (allowing the production of beer of 4% ABW or less); or (3) brewpub license. Like many states, Texas’ alcohol beverage laws mandate separation among the three tiers of the alcohol industry: manufacturing, wholesaling and retailing. The three-tier laws generally require alcohol beverages to be sold from manufacturers to wholesalers, from wholesalers to retailers, and finally from retailers to consumers. Texas treats both brewer’s permittees and manufacturer’s licensees as...

Continue Reading

Texas Court of Appeals Reverses T.G.I. Friday’s Label Decision

On Friday, October 13, 2017, a Texas Court of Appeals handed down the long-awaited decision in Texas Alcoholic Beverage Commission v. Mark Anthony Brewing, Inc., No. 03-16-00039-CV. The case involves Texas’ ban on private-label malt beverage/beer labels, which appear in regulations that are one aspect of the state’s comprehensive tied-house laws. Mark Anthony Brewing sought a declaratory ruling on those Texas Alcoholic Beverage Commission (TABC) regulations after the TABC refused to approve the labels for Mark Anthony’s T.G.I. Friday’s branded flavored malt beverages. T.G.I. Friday’s is also, of course, a well-known retail chain. Mark Anthony produces the T.G.I. Friday’s line under a trademark license from the retailer, as governed by a trademark licensing agreement between the parties. A Texas trial court ruled in favor of Mark Anthony, holding that the TABC regulations in question violate the First Amendment. The trial court further ruled that Mark...

Continue Reading

Texas Supreme Court Weighs In on Tied House

Late last month, the Texas Supreme Court issued a ruling in Cadena Comercial USA Corp. d/b/a OXXO v. Texas Alcoholic Beverage Commission, finding in favor of the Texas Alcoholic Beverage Commission (TABC) and weighing in for the first time on the application of Texas’ tied house law. In a 6-2 decision, the court upheld the TABC’s denial of a retail permit to a foreign corporation whose parent company also holds a 20 percent ownership interest in a foreign brewer. Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA) holds both a 20 percent interest in the stock of two Heineken entities, as well as–through intermediate holding companies–100 percent of the ownership of Cadena Comercial USA Corp. (Cadena), a company that operates convenience stores. In 2011, Cadena sought licensing as a beer and wine retailer in Texas.  During the license application process, the TABC discovered FEMSA’s ownership of Cadena and interest in Heineken and rejected Cadena’s permit...

Continue Reading

Proposed Regulation in Texas on Name and Address Labeling for Malt Beverages

Last week, the Texas Alcoholic Beverage Commission (“TABC”) circulated a draft amendment of Texas’ name and address labeling regulation for “malt beverages” (beer).  A copy of the proposed amended regulation (with a redline of the changes) is can be found here. Consistent with TTB regulations on name and address labeling for malt beverages, the current regulation requires only the name and address of the importer, with foreign producer information optional.  The revised regulation, in contrast, requires: On labels of containers of imported malt beverages, the name and principal place of business of the foreign manufacturer, bottler or shipper must be stated The proposed regulation accordingly marks a significant Texas departure from federal labeling rules.  First, it requires foreign producer information on the label.  Second, it requires the label to show the name and principal place of business address of the foreign producer.  This could require...

Continue Reading

Texas Court of Appeals Hands Down Instructive Administrative Law Opinion

A recent Texas Court of Appeals decision, EATX Coffee, LLC v. Texas Alcoholic Beverage Commission, provides an important reminder of how principles of administrative law may check the current trend towards “regulation by Internet.” Ct. of App of Texas, 4th Dist., No. 04-16-00213-CV (Dec. 7, 2016). Like TTB and many other state alcohol beverage authorities, the Texas Alcoholic Beverage Commission (TABC) periodically publishes “Question and Answer” (Q&A) documents purporting to interpret the Texas Alcoholic Beverage Code. The EATX opinion arose from a challenge of two particular Q&A’s that, in effect, banned the filling of “crowlers” by Texas beer and wine retailers. A crowler is an aluminum can that a retailer can fill with beer and seal for consumers to take away from the retail premises. While TABC has declared that retailers may fill and sell “growlers” of beer (large bottles filled and sealed by retailers), the TABC’s Q&A’s declared the filling...

Continue Reading

Guidance Provided on Interplay of “Dormant” Commerce Clause and the 21st Amendment

On April 21, the US Court of Appeals for the Fifth Circuit handed down its opinion in Cooper v. Texas Alcoholic Beverage Commission, No. 14-51343.  It provides further guidance, at least within the Fifth Circuit, on the interplay of the “dormant” Commerce Clause and the 21st Amendment following the Supreme Court of the United States’ oft-cited decision in Granholm v. Heald, 544 US 460 (2005). The case arose when the Texas Package Store Association attempted to revisit the Fifth Circuit’s two-decade old decision in Cooper v. McBeath, 11 F.3d 547 (5th Cir. 1994).  Cooper v. McBeath permanently enjoined the Texas Alcoholic Beverage Commission (TABC) from enforcing certain residency requirements imposed on wholesalers and retailers by the Texas Alcoholic Beverage Code.  In that decision, the Fifth Circuit decided that the residency requirement was a protectionist measure and therefore unconstitutional under the so-called “dormant” Commerce Clause of the US...

Continue Reading

Texas Regulators Provide Direct Shipping Options

On June 11, the Texas Alcoholic Beverage Commission (TABC) issued a Marketing Practices Advisory (MPA 055) clarifying the volume that a winery can legally ship directly to Texas consumers in a single year.  The limit is 35,000 gallons and the calculation must include the total volume shipped over a calendar year. The recent TABC Advisory builds on a 2012 TABC Licensing Bulletin (LIC001) that outlined the required permit and process for wineries authorized to make direct shipments.  It also noted that Texas package stores are authorized to deliver wine directly to 15 million Texas residents of legal drinking age.  A stern warning appears at the end of the bulletin that unauthorized shipments would be actionable by the TABC. A strong record of voluntary compliance will help preserve and expand e-commerce privileges for industry suppliers.

Continue Reading

STAY CONNECTED

TOPICS

ARCHIVES