Oklahoma Liquor Law Modifying Distribution Guidelines Found Unconstitutional

A state law modifying alcohol distribution guidelines, approved by voters in 2016, has been found unconstitutional.

Under State Question 792, manufactures can grant certain wholesalers exclusive rights to distribute their product to retail stores. Senate Bill 608 established a list of the top 25 wine and spirits sold in the state, requiring the items on that list be made available to all wholesalers across the state.

Monday, Oklahoma County District Judge Thomas Prince ruled that change violated the exclusivity provision enshrined in the state constitution through SQ792.

The Retail Liquor Association of Oklahoma said the top 25 list would have helped alleviate a lack of competition among wholesalers. They say 2016 voters were in favor of strong beer and wine in grocery stores, not realignment of wholesale distribution.

“This restriction of the free market has resulted in higher prices and reduced selection for many wines & spirits,” the association said in a statement. “The net effect of that change to our state constitution allows a single company to control the price and availability of every drop of wine and spirits sold in our state.”

The Institute for Responsible Alcohol Policy said restricting access to product is a right manufactures enjoy in other states.

“SQ 792 allows suppliers of wine and spirits to choose whether they sell their product to all wholesalers, or only those who agree to standards regarding quality control, inventory management, sales information, marketing, intellectual property protection and other matters,” IRAP said in a statement. “SB 608 would require producers to sell to all licensed wholesalers, a burden no other industry faces.”

That group’s president said he sympathizes with small liquor store owners; however he said their frustration is misplaced.

“Those who complain are complaining or are upset because their business has been detrimentally impacted, but it’s not because of wholesalers, it’s because of wine in grocery stores and they’re having to adjust their business model, John Maisch said. “I am very sympathetic toward that.”