Members of the U.S. Supreme Court are hearing a case that originates out of Tennessee involving the alcohol sales industry, and the outcome could have implications nationwide, according to Forbes.
Specifically, the court could rule on whether states can pass laws that protect in-state businesses in the alcohol industry from outside competitors.
Oral arguments in Tennessee Wine & Spirits Retailers Association v. Blair were to begin last week, Forbes reported.
“The court will consider a Tennessee law that limits liquor licenses to residents who’ve lived in the state for at least two years,” Forbes reported.
“Renewing the license, which expires after just one year, requires residing in Tennessee for no less than 10 consecutive years. As a result, both those living outside Tennessee and those newly arrived in the Volunteer State are completely barred from obtaining a liquor license, which limits competition for long-established incumbent businesses.”
The story profiled Doug and Mary Ketchum, who run a small liquor store in Memphis. They moved to Tennessee from Utah.
Total Wine & More, a larges independent wine retailer, was interested in the Tennessee market at the same time the Ketchums were seeking their license, Forbes said.
“With nearly 200 stores nationwide and roughly $3 billion in revenue, Total Wine could aggressively compete with local liquor stores,” the magazine reported.
“In response, the Tennessee Wine and Spirits Retailers Association, which represents over 500 liquor store owners across the Volunteer State, demanded that the state deny retail liquor licenses to both Total Wine and the Ketchums. The Association threatened to sue if regulators granted the licenses.
The Tennessee Alcoholic Beverage Commission, Forbes went on to say, recommended approving the licenses for the Ketchums and Total Wine and declined to enforce state requirements for six years.
“To resolve the issue, the state went to court. In 2017, a federal district court ruled that Tennessee’s durational residency requirements violated the Constitution. Less than a year later, the decision was upheld on appeal. Thanks to those rulings, both the Ketchums and Total Wine were finally able to get their liquor licenses.”
Last year, though, the Supreme Court granted the TWRSA’s cert petition, giving the group one last chance to block their new competitors, according to Forbes.
“At oral argument for Tennessee Wine, the Supreme Court will consider the scope of the Twenty-first Amendment, which famously repealed Prohibition. But the Amendment’s second section also imbued states with broad powers to regulate liquor,” Forbes reported.