Federal Judge: Kentucky's Rule Keeping Wine and Liquor Out of Groceries is Unconstitutional

Source: Business Lexington

By Erik A. Carlson

August 14, 2012

A long-standing law forbidding groceries and gas station convenient stores from selling wine and liquor has been overturned by a Federal Judge in Louisville.

The opinion, handed down Tuesday by US District Court Judge John G. Heyburn, II, marks a big win in a five-year push from the Food With Wine Collation, a consortium of large and small Kentucky retail grocery, supermarket and convenience stores owners aimed at allowing their retail outlets to apply for liquor and wine package sale licenses.

".the State might want to limit accessibility to the general public to avoid abuse of these products. These interests certainly justify tighter controls on the sale of these products, such as capping the number of retail package licenses for wine and liquor, but not beer. However, it does not explain why a grocery-selling drugstore like Walgreens may sell wine and liquor, but a pharmaceutical-selling grocery store like Kroger cannot. This distinction would seem to have no relationship whatsoever to the control of higher-proof alcohol sales or the abuse of these products. The State has not explained that rational relationship, and the Court cannot think of one," Judge Heyburn wrote in his opinion.

The judge also found fault with the state's argument that many large groceries now offer self-checkout lanes, which could make prevention of underage consumption of high-potency alcohols more difficult. However, "drugstores are free to install these machines and continue their liquor and wine sales. Consequently, the Court can find no conceivable reason why grocery stores offer either more or less personal observation of customer purchases than any other types of stores."

Before seeking a judicial remedy, the Food With Wine Coalition sought the legislative angle to overturn the law, according to Stephen Pitt, attorney for the Food With Wine Coalition

"They viewed it discriminatory then and after several failed attempts during several sessions of the legislature, when they didn't get anywhere, then the decision was made to turn to the courts. The coalition had hoped to have the matter handled legislatively, but that was not something that occurred, so there was not much left but to resort to the courts at that point.

The judge will meet with the parties involved in the case next week according to Pitt. The judge's opinion will not be an official order until after that meeting, he said, at which point they should know the process by which these stores can begin to apply for liquor licenses.

Dick Brown, spokesman for the state's Public Protection Cabinet said the state is still digesting the judge's opinion and has not decided on a course of action. The state could appeal the ruling and ask the judge for a stay, keeping the status quo during the appeals process. Though Brown said he is unsure whether the cabinet and its division of Alcohol Beverage Control will contest the ruling.

"Right now we're still studying the ruling to determine what happens next, so it is really too early to say what the impact is going to be," Brown said.

As for now, members of the Food With Wine Coalition feel vindicated according to the coalition's head Ted Mason.

"They're relieved. There's been a lot of time, effort by the companies involved and they're quite pleased and ready to move forward."

Mason said he's not sure what percentage of his members would file for liquor license, or how long the process could take given the large number of stores possibly applying at once. He's just glad to know they'll be able to.

"From a broad umbrella of the association, I couldn't tell you who would and who will not participate in the marketplace, but the ability for them to decide their own business case and they know their customers best. they'll have the option," Mason said.