In Texas, as in much of the nation, alcohol is regulated under the so-called “three-tier system,” which requires alcohol manufacturers, distributors and retailers to be separate and independent from each other.
Texas, however, takes this requirement to the extreme. Not only may a company not operate in more than one of the three tiers, but state regulators have taken the position that a company that manufactures or distributes alcoholic beverages may not own even a single share of stock in any company that sells alcohol or vice versa.
The craziness of the “one share rule” is illustrated by a new lawsuit filed against the Texas Alcoholic Beverage Commission by the Texas Association of Business and, perhaps more notably, by the McLane Co., a drinks distributor owned by Warren Buffett’s Berkshire Hathaway Inc.. Because Berkshire also owns shares in Wal-Mart, which sells alcoholic beverages, McLane is ineligible for a Texas distributor license under the rule….(Read more at the R Street Institute Blog)
