Texas ABC “One Share Rule” Challenged in Court

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The Texas Association of Business, the McLane Company and McLane Beverage Distribution, Inc. have filed suit in U.S. District Court challenging the Texas Alcoholic Beverage Commission’s (TABC) position that it is illegal for a person or business (governed by the three-tier regulatory system) that operates in one tier to own even a single share of stock in a company that operates in another tier, even in the absence of any control or influence over the other company (the One Share Rule). The suit also claims that TABC fails to apply the rule consistently across all licensees. The suit comes in the wake of TABC’s rejection of McLane’s 2012 application for an alcohol distribution permit due to McLane parent company’s (Berkshire Hathaway) interest in retailer Wal-Mart.

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