Berkshire Hathaway vs the Three-Tier System

A company controlled by Warren Buffett's Berkshire Hathaway is taking on the three-tiered distribution system in Texas:

"While it's debatable whether the US's three-tier, wine-distribution system may be outdated and inefficient, most of the industry players in Texas seem to be happy with its current structure. – both the Texas courts and local wine executives seem to be showing a cold shoulder to a food service company's continued push to get a wine distribution license in Texas.

The current system has been outdated for 40 years, says a beverage attorney on background. "The big guys control the capital and they are making a lot of money." But they also provide a great service, he adds. Perhaps that is why many key players still value their services in Texas.

The McLane Company Inc – which has sold food products in Texas since the 1980s through the AmeriServ and McLane Foodservice trademarks – has been litigating with the state's regulatory board the Texas Alcoholic Beverage Commission (TABC) to get their own wine distribution license for several years.

The company is challenging Texas' "One Share Rule", by having filed a complaint last year with the TACB in Austin. McLane's parent company, Berkshire Hathaway Inc, owns shares in Walmart and is therefore prohibited from having a distribution license per the TABC's "Tied House" laws. These regulations prohibit any overlapping ownership of different types of businesses in the alcoholic beverage industry..."

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R Street's Josiah Neeley previously wrote about Warren Buffett's battle against the three-tiered system in Texas here: