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Costco ruling – Findings of Fact and Conclusions of Law

We added the Findings of Fact and Conclusions of Law from the Costco v. Hoen case to our Document Library. Here are a few key passages from the document (emphasis added)

The Sherman Act reflects a strong federal policy in favor of competition. At the same time, the Twenty-first Amendment provides each state with broad authority to regulate alcohol products in order to advance certain “core interests,” such as promoting temperance, ensuring orderly market conditions, and raising revenue. This case requires the Court to consider whether the challenged restraints are effective in advancing the state’s core interests under the Twenty-first Amendment and whether the state’s interests outweigh the federal interests in promoting competition.

For the most part, the Court finds that the policies challenged by Costco are not effective in advancing the state’s core interests under the Twenty-first Amendment. The Court also finds that the state’s interests do not trump the federal interest in promoting competition even when the restraints may be minimally effective in advancing the state’s interests.

The following state restraints are preempted by the federal Sherman Act and are not shielded by the Twenty-first Amendment:

(a) Policies that require beer and wine Policies that require beer and wine distributors and manufacturers to �post� their prices with the state and to �hold� those prices for a full month;

(b) Policies that require beer and wine distributors to charge uniform prices to all retailers;

(c) Prohibitions on selling beer and wine to retailers on credit;

(d) Prohibitions on volume discounts for beer and wine sales;

(e) Policies that require beer and wine distributors to charge the same �delivered� price to all retailers, regardless of the actual delivery costs;

(f) Prohibitions on central warehousing of beer and wine by retailers; and

(g) Policies that require a 10% minimum mark-up on sales of beer and wine from producers to wholesalers, as well as a 10% minimum mark-up on sales of beer and wine from distributors to retailers.

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