Total Wine loses appeal to over-turn Connecticut minimum pricing laws

US retailer Total Wines & More has lost an appeal to overturn a minimum price law in Connecticut, after a court ruled in favour of the US state’s booze laws.

The US second circuit ruled in favour of Connecticut’s current alcohol pricing laws, saying they did not violate anti-trust laws set down by the 1890  Sherman Act.

The national retailer, which is one of the US’s largest specialist drinks retailers, launched the case in 2016, challenging the state over its setting of minimum prices on booze, which requires wholesalers to publish bottle prices each month – to allow smaller retailers to keep prices in line with larger retailers – and bans them from offering discounts for higher volume purchases.

According to a report published in legal journal Law360, the retailer argued that the state’s restrictions ‘discouraged competition and kept prices “substantially above what fair and ordinary market forces would dictate” if wholesalers were free to set their own prices’, discouraging any wholesaler from being the first to break ranks and thereby ensuring vertical price-fixing between wholesalers.

It further argued that retail prices for wine and spirits in Connecticut were as much as 24% higher than prices offered for identical products in surrounding states, according to court documents quoted by legal newsite, CourthouseNews. 

But while the 45-page precedential ruling found that the Connecticut Liquor Control Act’s requirements was a restriction on trade, it was not a violation of the Sherman Act, Law360 reported.

Following the decision, the retailer, which operates stores in 21 different states including four stores in Connecticut, could take its case to the High Court.

It is already involved in a potential landmark case being heard by the High Court. It has challenged the state of Tennessee over the state’s strict residency requirement in which anyone applying for an initial alcohol licence must have been a resident in Tennessee for two years and in order to renew that initial one-year license, they must have been a resident in the state for ten consecutive years.

The case, which has also been brought by Doug and Mary Ketchum of Kimbrough Wine and Spirits, is being backed by the National Association of Wine Retailers and others, including a group of 81 consumers, versus a group of existing retailers in the state who want to retain the status quo.

Total Wine & More, who want to open a stores in the state, argues that the residency requirement is discriminatory and therefore unconstitutional, but the case may have wider implications for interstate wine sales.