- Associated Press - Wednesday, December 2, 2015

INDIANAPOLIS (AP) - The largest beer and wine wholesaler in Indiana is asking a state appeals court to find a law unconstitutional that prohibits beer wholesalers from seeking a permit to also distribute liquor.

A three-judge Indiana Court of Appeals panel heard arguments Tuesday from attorneys representing Lawrence-based Monarch Beverage Co. and the state, The Indianapolis Star reports (https://indy.st/1jyf2KU ). Monarch wants to also distribute liquor to retailers, but state law says if it wants to do that, it must not sell beer.

Tuesday’s hearing came nearly two years after the company sued the commissioner of the Indiana Alcohol and Tobacco Commission. Monarch argues the law prohibiting beer wholesalers from seeking a liquor distribution permit violates the Indiana Constitution’s Equal Privileges and Immunities Clause.

A Marion County judge previously ruled against Monarch, which appealed.

Monarch’s attorney, Kannon Shanmugam, argued Tuesday the law discriminates against beer wholesalers, treating them differently from others such as retailers and wine wholesalers, who can distribute liquor. He said a small number of national distributors dominate Indiana’s liquor wholesale market, and that many of them, “ironically enough, are allowed to distribute beer in other states.”



The state Legislature, Monarch argues, never gave an explanation for not letting beer and liquor to be distributed by one wholesaler. The company says the restriction came from an antiquated law from a patronage system after Prohibition.

Thomas Fisher, solicitor general for the Indiana attorney general’s office, said he doesn’t believe beer wholesalers receive different treatment. He said Monarch isn’t objecting to law because of disparate treatment, but because of economic reasons.

The company already distributes wine from a California-based manufacturer, and wants to sell liquor that the manufacturer produces.

Fisher also said that there’s a good reason to keep beer and liquor separate on the wholesale level, with one more potent than the other and needed to be addressed in a different way.

The appeals court will rule at a later date. The company lost a lawsuit in federal court, where it argued the Indiana law violated the U.S. Constitution’s Equal Protection Clause. A U.S. district judge said the company wasn’t able to show a similar company being treated differently.

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Information from: The Indianapolis Star, https://www.indystar.com

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