Day and Malinoski Examine Possible Implications for Alcohol Beverage Industry of Biden Administration’s ‘Anti-Trust Executive Order’

Litigator and alcoholic beverage law attorney Corey Day and litigation attorney Alyssa Malinoski contributed an article to Artisan Spirit Magazine titled “(anti) Trust the Process: Renewed Scrutiny of the Alcohol Industry,” published Winter 2022. The authors discuss possible impacts on the alcohol beverage industry of an Anti-Trust Executive Order (EO) recently issued by the Biden administration. The EO instructs federal regulators to find avenues for smaller businesses to compete in industries where power is focused among a few large entities.

For the beer, wine, and spirits industries, the EO directs the Secretary of the Treasury to produce a report assessing several “threats to competition and barriers to new entrants.” After publication as a joint report with the Federal Trade Commission and Justice Department, the Secretary of the Treasury will consider possible actions to promote competition and access to markets for smaller and independent brewers, winemakers, and distilleries.

The authors note that there are those who favor the federal government creating direct-to-customer retail channels or even outright abolishing the current system of distribution. However, because state laws created to govern how alcohol is sold and distributed are authorized by the 21^st Amendment, those laws have constitutional authority lacking in other industry regulations, and any radical actions taken by the federal government would likely result in expensive, extensive litigation.

“That said, the government need not go so far,” the authors conclude. “If the Treasury’s report concludes the current three-tier system is anticompetitive, that could motivate states to amend their laws to promote competition.”