Judge Issues Stay in Costco Case

In other three tier news: Va. Regulations upheld; Could U.S. trade reps use state regs as a bargaining chip in global talks?

A federal district judge on Thursday issued a stay on a ruling that Washington state’s three-tier system violates antitrust laws and needs to be overhauled.

The stay gives the state Legislature until May 1 to address the laws.

The judge, U.S. District Judge Marsha Pechman, in April ruled that a wide range of the state’s laws governing alcohol beverage distribution violated antitrust laws and needed to be scrapped. Among the provisions targeted: volume discounts to retailers, requirement that deliveries be paid with cash instead of credit and a minimum mark up requirement for producers and distributors.

The Seattle Post Intelligencer has the story.

In other three-tier developments this week, the U.S. Fourth Circuit Court of Appeals upheld parts of Virginia’s alcohol beverage code that treat out-of-state entities differently from in-state entities.

Specifically, the laws said state stores could only sell wine made in Virginia and limited the amount of wine Virginians could bring in from out-of-state for personal consumption.

The decision reversed a district court ruling. Beer Marketer’s Insights Express reported:

Appeals Ct ruled the Dist Ct had erred when it concluded these 2 laws "unconstitutionally discriminated against interstate commerce."

Finally, an interesting story in Thursday’s Beer Business Daily cited a Canadian trade treaty analyst who raised the possibility that U.S. trade negotiators could offer up “dismantling of state-based regulation of alcohol to other countries as a bargaining chip during World Trade Organization treaty negotiations.”

The story quoted Jim Grieshaber-Otto, a treaty analyst at Cedar Isle Research in Ontario.

…there is an “underlying tension” between regulators and trade negotiators, as the former want the status quo while the latter wishes to open up markets to free trade …

And trade barriers (like cash laws, residency requirements, credit terms, dry areas, really any restriction on trade within a state) are like bargaining chips to be doled out.

To be sure it’s all speculation at this point. And the article notes that U.S. negotiators have given oral assurances not to offer up state regulation. But, the article says, “it is still in the crosshairs as the European Union in particular has requested to include alcohol beverage when breaking down local regulations.”