The Supreme Court May Have Paved the Way for Cheaper Booze in Some States
Yesterday, in a 7-to-2 ruling, the Supreme Court struck down a Tennessee law that required anyone looking to open a liquor store in the state to have been a Tennessee resident for two years before obtaining a license. The decision could have implications for retailers both big and small — and, in fact, that’s precisely who was behind the case: Total Wine & More challenged the law after the massive wine retailer unable to open a Tennessee outpost, but so did Doug and Mary Ketchum, a couple from Utah who wanted to open a wine store.
The ruling could have implications in Tennessee and beyond. In all, 35 states backed the Tennessee Wine and Spirits Retail Association, who argued that these sort of durational-residency requirements for liquor retailers and wholesales were protected by the 21st Amendment ending Prohibition. At least 21 states have laws similar to Tennessee’s, so in theory, this decision that residency restrictions on the sale of alcohol unfairly restrict interstate commerce could make it easier for liquor stores to open in other states as well — especially for large chains like Total Wine that have a national presence.
For consumers, this change could have a number of effects. In Tennessee, for instance, as NPR points out, it’s predicted that competition from major retailers like Total Wine will drive down prices, as well as potentially bring more brand options into the state. Of course, this additional competition could also potentially force some Tennessee-owned companies out of business (though since the Supreme Court essentially ruled that their market was being artificially protected, it becomes more difficult to feel sympathetic for them).
Meanwhile, it’s also possible this decision could have larger implications for wine sales as a whole. As regular SCOTUS blogger Amy Howe writes, “In his opinion, Alito indicated that the Constitution bars states from discriminating against ‘all out-of-state economic interests’ — not just out-of-state alcohol and alcohol producers, as the retailers had argued. This means that states that allow in-state retailers to ship wine to customers within the state could face an uphill battle in preventing sales from out-of-state retailers as well.”
