Recently, the Eighth Circuit affirmed a ruling upholding Missouri’s liquor statute requiring a corporation that wants to obtain a wholesaler license for the sale of intoxicating liquor containing alcohol in excess of five percent to be a “resident corporation.” Pursuant to Missouri’s statute, to qualify as a “resident corporation” requires that, among other things, all officers and directors be residents of Missouri for the three years immediately prior to filing the application. Additionally, all resident stockholders must own at least sixty percent of all the financial interests in the business.

Missouri uses a tier system to regulate the sale of alcohol, with a wholesaler the middleman between the producer and the retailer. Southern Wine and Spirits of America brought suit after its wholly owned subsidiary, Southern Wine and Spirits of Missouri, was denied a wholesaler license. Missouri’s Division of Alcohol and Tobacco denied its application because ninety-seven percent of the parent corporation’s voting shares, and fifty-one percent of its total shares, are owned by four Florida residents.

Upholding the residency requirement, the Eighth Circuit found that in enacting the statute the legislature could have believed that a resident wholesaler “is more apt to be socially responsible” and respond to the concerns of the state and its residents. The court also found that states may regulate the sale of alcohol so long as the state policies “treat liquor produced out of state the same as its domestic equivalent.” Therefore, the court concluded that the statute is constitutional because it does not treat out of state liquor differently as it only regulates wholesalers, and it is rationally related to the regulation of alcohol sales by the state. The case is Southern Wine and Spirits of America, Inc. v. Division of Alcohol and Tobacco Control (8th Cir. September 25, 2013).