Supreme Court Upholds Victory for Modernized Alcohol Regulations

National Taxpayers Union is pleased by the U.S. Supreme Court’s decision to uphold a lower court’s ruling that struck down a protectionist Tennessee law that prevented out-of-state residents from operating liquor stores. 

“The law served no legitimate public purpose and the Supreme Court’s decision should pave the way for national efforts to modernize alcohol laws to the great benefit of consumers and taxpayers,” said Brandon Arnold, executive vice president of National Taxpayers Union. 

Arnold added: “For many decades, many state alcohol laws have only served to shield politically powerful businesses from competition -- thereby reducing options and raising costs for responsible consumers. The Supreme Court’s decision should be a wake up call: it’s time to reject cronyism and create a level playing field.” 

The case, Tennessee Wine and Spirits Retailers Association v. Thomas, pertained to a state statute that required owners of liquor stores to be residents of Tennessee for at least two years. To renew a liquor store license, the owner was required to have lived in the state for 10 years. This law was a blatant violation of the U.S. Constitution’s Commerce Clause, which grants the federal government the sole power to regulate interstate commerce. Since the ratification of the 21st Amendment in 1933, special interest groups have claimed that alcohol was effectively exempt from the Commerce Clause and worked with state policymakers to erect barriers to ward off competition from out-of-state businesses. For instance, some states still block direct-to-consumer wine shipments and most block shipment of beer and spirits.

In overturning the Tennessee law, the U.S. Supreme Court rightly noted that the 21st Amendment gives States authority to regulate alcohol for the purpose of public safety and health, it “does not license the States to adopt protectionist measures with no demonstrable connection to those interests.” This expressly rejects the arguments of entrenched special interests and opens the door to repealing a host of anti-consumer state alcohol laws.