A federal appellate court has upheld a Missouri Prohibition-era law that requires residency for alcohol wholesalers.
Miami-based South Wine & Spirits challenged the law arguing it amounted to economic protectionism by the state.
Missouri has a three-tiered system that requires wholesalers based in the state serve as the distributors from those that make beer and alcohol to the retailers that sell it.
E.B. Solomont has been covering the suit for the St. Louis Business Journal.
She says St. Louis-based wholesaler Major Brands considers the ruling a big win.
"They opposed Southern’s lawsuit and filed a brief with the Missouri Wine and Spirits Association," Solomont said. "So they think the residency requirement brings value to the state of Missouri. They keep jobs local; they promote social responsibility, including responsible consumption."
Solomont says Southern Wine & Spirits has not said whether it will appeal the ruling.
"But this a $9 billion company based in Miami. They have operations in 35 states and they’re a very big player," she said. "It might be worth noting that they’ve overturned residency laws in Texas and Indiana."
The ruling comes amidst turmoil in Missouri’s liquor wholesale industry that’s been dubbed the "liquor wars."
It stems from a fight over Missouri’s 1975 franchise law, which prevents suppliers from ending contracts with wholesalers without good cause.
In 2011 a federal judge ruled that a beer distributor in Massachusetts could end its contract with Missouri Beverage Co.
The ruling led to several other suppliers ending contracts with Missouri wholesalers, including Major Brands, and a flurry of lawsuits has followed.
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