AUSTIN – A bill by State Sen. Kelly Hancock of North Richland Hills would expand the availability of ready-to-drink spirits-based cocktails into Texas grocery and convenience stores while loosening decades-old restrictions on the Sunday sale of liquor.
Companion measures by Hancock and Rep. Justin Holland of Rockwall, both Republicans, would give Texas a far larger share of the economic bounty from liquor-based pre-mixed beverages that began booming in popularity during the pandemic, say supporters.
Also known as “spirit coolers,” the pre-made drinks are often sold in packs of cans or bottles and span the full reach of drinking preferences, from old-fashioneds to Moscow mules to margaritas.
Under the legislation, the market in the Lone Star State could expand from the nearly 3,300 Texas liquor stores where they can now be sold, into more than 21,000 grocery and convenience stores, which would be permitted to sell the packaged mixed drinks along with wine, beer and malt beverages.
If the measure is passed and signed into law, the sale of liquor for off-premises consumption in Texas would be permitted for the first time in nearly 90 years, according to a spokesman for the Texas Alcoholic Beverage Commission. The sale of liquor for on-premises consumption is currently permitted on Sunday at bars, hotels and restaurants.
A majority of other states permit liquor-based pre-mixed cocktails to be sold in grocery and convenience stores, but Texas allows them to be sold only in liquor stores, which are closed on Sunday under an 88-year-old state law enacted two years after Prohibition was repealed in 1933.
Liquor stores and beer distributors are waging a concerted attack against the Hancock-Holland bills, SB1288 and HB2200, ensuring a legislative showdown between segments of the retail and alcoholic beverage industry that pump billions of dollars into the Texas economy. Also on the table is the continuation of a years-long push to allow liquor stores to open on Sunday, proposed in the current session under HB1346 by State Rep. John H. Bucy III, an Austin Democrat.
A long-standing debate in Texas
Efforts to either widen or block Texans’ access to alcohol have been at the heart of bruising legislative and municipal fights dating to the 19th century, ranging from local battles that determined whether precincts or entire cities became “wet” or “dry” to the statewide push for liquor-by-the-drink in Texas that finally succeeded in 1971.
“As industries innovate and new products become staples in the marketplace, it only makes sense for us to take a look at ways government can reduce regulatory red tape,” Hancock said in a statement released by the Distilled Spirits Council of the United States. “I look forward to continuing to work on legislation that keeps free market principles at the core of Texas’ economic success.”
Hancock, who represents much of Tarrant County, declined repeated interview requests by the Fort Worth Report, but Holland told the news organization that HB2200 “has been my most popular bill that people have called me on.” He called the legislation “a pretty common sense bill” that would expand competition and boost small businesses.
The state’s grocery and convenience stores, which are allowed to stay open seven days a week, are permitted to sell such beverages as beer, craft cider, seltzers and wine – but not ready-to-drink cocktails containing liquor, also called distilled spirits. The lawmakers’ bills would amend the Alcoholic Beverage Code to allow the stores to sell ready-made mixed drinks containing no more than 17% alcohol.
In addition to liquor, the ready-to-drink cocktails also contain non-alcoholic ingredients such as juices and water and often have an alcohol content of around 5%.
It would be the first time since the creation of the state’s alcohol regulatory agency in 1935, known then as the Texas Liquor Control Board, that any form of liquor-based beverage could be sold for off-premises consumption on Sunday, according to Chris Porter, spokesman for the Texas Alcoholic Beverage Commission.
The bills do not amend the section of state law relating to hours of sale for liquor.
The definition of distilled spirits, often described as hard liquor, typically covers whiskey, rum, tequila, vodka, gin, basically anything manufactured by a distillery, according to the Alcoholic Beverage Commission.
The Texas Package Store Association and the Wholesale Beer Distributors of Texas have both pushed back against the measures.
“These bills are nothing but a money grab and put profits above people,” Lance Lively, executive director of the package store association, said in a statement.
Tom Spilman, president of the Wholesale Beer Distributors, said the bills are opposed by “the vast majority of Texans” and would result in a “drastic change to Texas liquor law.”
‘Beer distributors don’t like it’
Backers of the legislation dispute the claims, citing a Distilled Spirits Council survey that 86% of consumers agree that spirits-based ready-to-drink cocktails should be sold where beer and wine are sold.
“Beer distributors don’t like it. Neither do the package stores,” Holland acknowledged in a cellphone interview with Fort Worth Report. “We’ve had some opposition from these groups, because they’re doing their job, I guess, to try to protect their industry. But I’m not in this business to try to protect the package store or beer distributor industry. I care more about the small businesses in Texas that will benefit from this than I am protecting somebody’s structure of their industry.”
Ready-to-drink cocktails have been a major driver in national liquor sales, enabling the sale of spirits to experience their fastest growth in two decades, according to economic surveys by the Distilled Spirits Council, also known as DISCUS.
Over the past 20 years, said the organization, the spirit industry’s average growth was 4.5 percent but has surged to an average of 7.5 percent in the plast 5 years, largely on the strength of ready-to-drink cocktails, or RTDs.
Pre-mixed cocktails topped the list of the five fastest growing spirits by revenue last year, registering a 35.8 percent increase to boost total revenue from $1.6 billion in 2021 to $2.2 billion in 2022.
“A number of these products have been around for some time, but the popularity…has really exploded in the last few years,” said Andy Deloney, a senior vice president of the Distilled Spirits Council, a major lobbying force behind Hancock’s and Holland’s bills in Texas.
RTD sales are permitted at grocery stores in 31 states and at convenience states in 29 states, according to the Distilled Spirits Council.
“This legislation helps bring decades-old alcohol laws in line with modern-day product offerings,” said John McCord, executive director of the Texas Retailers Association. “Grocery and convenience stores already sell sugar-based seltzers and wine-based spritzers, so we appreciate Sen. Hancock and Rep. Holland for proposing this logical step that would allow these retailers to carry other low-ABV RTDs.”
The legislation is also a top priority for the Texas Food and Fuel Association, which represents more than 12,000 convenience stores, grocery stores, and truck stops. A message posted on the association’s website in early March reported that “TFFA worked with Texas Senator Kelly Hancock to file SB1288, allowing convenience stores and grocery stores to sell spirit based canned cocktails.” It also invited members to message a companion internet site to boost legislative support for the bill.
The organization includes high-profile member-chains such as Buc-ee’s, Love’s Travel Stops and RaceTrac as well as smaller operators who are eager to be able to sell ready-to-drink cocktails to have access to access to “a big booming market,” said Paul Hardin, the TFFA’s president and CEO.
“They’re wanting this so bad,” Hardin said.
He said his organization has “been kind of strategizing and working on this idea for well over a year” to put Texas on par with other states that permit ready-to-drink sales in grocery and convenience stores.
“You’d think Texas would be leading a category like this,” he said.
David Montgomery is a longtime journalist who has served as an Austin Bureau chief for the Dallas Times Herald, Austin and Washington bureau chief for the Fort Worth Star Telegram, and Moscow bureau chief for Knight Ridder Newspapers.
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