How Supporters of Unequal Wine Laws Think

Posted by Tom Wark on Aug 16, 2012

A recent court decision is causing something of stir within the insular circles of beverage alcohol law and among Kentuckians, who as a result may one day find they a bottle of Pinot in the same store they purchase their pasta ( I know…crazy, radical, harrowing idea, that!)

In Kentucky, according to an ancient law, wine may be sold at a drug store that also sells food items. But a grocery store, where you can also purchase pharmaceuticals, wine may not be sold. As you might imagine, grocery stores wanting to serve their customers who want to buy Pinot with their pasta and thinking their unequal treatment where selling wine was concerned, suggested a legislative change allowing grocery stores to sell wine.

That didn't work. The powers that be arrayed against them.

So the grocery stores did what any good American grocery store would do. Filed a lawsuit challenging this arbitrary distinction between grocery stores and drug stores.

On Tuesday a Federal District Court Judge in Kentucy ruled that there was no rational basis for the distinction, that the distinction violated the Equal Protection Clause of the Constitution and, thus, the Kentucky prohibition on wine and spirits being sold in grocery stores is unconstitutional.

Something has to be pointed out here. The judge, in determining if the ban on wine sales in grocery stores vas a violation of equal protection, applied what is called "The Rational Basis Test". Using this test, all the state must do to defend its law is show any "rational" basis for the unequal treatment of grocery stores and drug stores in Kentucky law. It is the lowest legal hurdle for a state to jump in order to defend one of it's laws.

It turns out, after working through a number of potential rationales for this law put forth by the state, the judge could find no rational basis for the unequal treatment. None. Zero. It was an arbitrary distinction between drug store and grocery store  that the judge couldn't even find an historical reason for in the record of Kentucky's legislative affairs.

The ruling will either stand and Kentucky must find a way to eliminate the unequal treatment or the ruling will be appealed to a higher court.

As you might imagine there are are those, besides Kentucky drug stores, that don't like this legal decision. There are those that in all cases defend state alcohol laws and the right of state to formulate any alcohol law, no matter how weird and arbitrary, that don't like this decision. I want you to read closing a comment from one such entity:

"This decision, whether it stands or not, underscores oft-voiced need for regulators/legislators/industry members to develop arguments/data that support alc bev laws that on their face seem “arbitrary” to non-insiders."

This comment comes from Beer Marketers Insight, a newsletter serving the beer industry that, as a journalistic outlet, is a staunch defender of a state's right to pass any alcohol law, no matter how arbitrary. The decisiion is, according to Beer Marketers Insight, "a blow to states rights."

"Seem Arbitrary"? Let's review. Drug stores, that also may sell consumable goods may sell wine. Grocery stores, that also may sell drugs, may not sell wine. "Seem Arbitrary"?

This is what consumers are up against. Industry insiders who find protection in arbitrary laws that burden free trade and consumer interests that must be defended at all costs. There are no arguments or data that demonstrate a rational reason for these kind of protectionist and arbitrary laws. Yet such arguments must be "developed". Out of what? The airy foam of beer suds? I might also point out that the folks at Beer Marketer's Insight and their fellow travellers that these protectionists, market diminishing and anti-consumer laws seem arbitrary to industry INSIDERS too.

The Judges ruling can be downloaded here. For a chuckle, read the footnote on page 16.