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83 Maryland Attorney General Reports and Opinions 3 (1998)

handle is hein.sag/sagmd0021 and id is 1 raw text is: ANTITRUST ALCOHOLIC BEVERAGES- STATE LAW REGULATING WHOLESALE PRICING OF WINE AND LIQUOR DEFENSIBLE UNDER ANTITRUST LAWS AND TWENTY-FIRST AMENDMENT December 21, 1998 The Honorable Kumar P. Barve House of Delegates You have requested an opinion as to whether Maryland's system of wholesale wine and liquor price regulation would withstand a challenge under the antitrust laws. In 1952, the Court of Appeals of Maryland answered that question in the affirmative. Nearly a half-century later, there is some question whether the Court of Appeals - or a federal court - would reach the same conclusion. To respond to your inquiry, we must answer three questions: I. Do the wholesale pricing provisions of the State liquor law mandate or authorize conduct that violates the antitrust laws? 2. Does the State regulatory system avoid preemption by the federal antitrust laws because it is state action and therefore excepted from the antitrust laws under the state action immunity doctrine? 3. Does the State's rightunder the Twenty-first Amendment to regulate the distribution and sale of alcoholic beverages outweigh application of the antitrust laws? For the reasons outlined below, it is our opinion that: 1. The wholesale pricing provisions of the State liquor law prohibit price discrimination and require wholesalers each month to post and maintain prices for all brands and sizes of liquor and wines. The proscription against price discrimination is compatible with federal antitrust law and likely to withstand any challenge. Although there are well-respected legal authorities on both sides of the 3