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Texas Court Affirms Constitutionality of Statute Prohibiting Brewers from Selling Distribution Rights to Their Products

Texas craft beer distributors received an early Christmas present in 2017. On December 15, 2017, the Texas Court of Appeals for the Third District, at Austin issued an opinion in Texas Alcoholic Beverage Commission v. Live Oak Brewing Co., et al. (NO. 03-16-00786-CV) in which the court overturned a lower court’s determination that a statute prohibiting self-distributing brewers from selling the distribution rights to their products was unconstitutional under the Texas Constitution.

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Cutting through the foam of Maryland's beer controversy

The purpose of Maryland’s regulation of the alcohol industry is “for the protection, health, welfare, and safety of the people of the state,” and it is for that reason only that state law justifies policies to “displace or limit economic competition.” 

Under that rubric, it should be fairly easy for lawmakers to establish that elements of the legislation approved last year to change the rules for the craft brewery industry fall short and should be amended.