Judge hands preliminary win to big-box retailers in ‘whiskey and Wheaties’ fight

An administrative law judge has sent a wrecking ball through the wall that separates whiskey from Wheaties in Florida. 

Judge John D.C. Newton II‘s final order, filed Friday, opens the possibility for big-box retailers to sell hard liquor in their main stores, instead of in separate stores as they do now. 

The order also confirmed that Walmart “seeks to obtain, but has not yet applied for, COP (‘consumption on premises’ liquor) licenses for some of its Florida retail locations.”

Newton, in a 20-page order, invalidated what’s known as the state’s obscure “Restaurant Rule,” which restricts eateries and other businesses that have COP liquor licenses from selling anything other than items “customarily sold in a restaurant.”

Here’s how it all ties together: Retailers that sell ready-to-eat food, such as Costco, eventually want to be able to use COP licenses normally granted to restaurants to avoid the prohibition on selling liquor in the same space as other goods.

For over eight decades, Florida law — enacted after Prohibition — has required retailers to sell hard liquor such as bourbon, vodka and gin in a separate store, though beer and wine can be sold in grocery aisles.

Newton found for Target, Walmart and the TopGolf “golf entertainment” chain, which has five locations in Florida, and against the state’s Department of Business Professional Regulation (DBPR), which oversees booze sales through its Division of Alcoholic Beverages And Tobacco (ABT).

The 24-year-old Restaurant Rule “provides no guidance on how (ABT) will determine what is ‘customarily sold in a restaurant,’ ” Newton wrote. The “inability to articulate the standards of the rule demonstrates the vagueness of the rule.”

Request for comment are pending with DBPR and companies involved in the administrative challenge. If the department appeals the decision to the 1st District Court of Appeal, the effect of Newton’s order would be on hold till the case is resolved there.

“We joined in this action to help provide our Florida customers a more convenient shopping experience, so this ruling is a big win for them,” Walmart spokesman Phillip Keene said in an email Friday night. “At this time, we’re reviewing exactly what this means for our business, so we can be prepared for the next step in the process.”

Bills have been filed since 2014 to remove the wall of separation between hard liquor and other items.

Last year, legislation barely passed both chambers only to get vetoed by Gov. Rick Scott, who said it’d be a job killer for small businesses, many of whom would likely be overwhelmed by big-box stores’ superior selling power.

The Restaurant Rule defines items “customarily sold in a restaurant” as only “ready to eat appetizer items, ready to eat salad items, ready to eat entrée items, ready to eat vegetable items, ready to eat fruit items (and) hot or cold beverages.”

State law, however, is silent.

The retailers’ petition said the state “has granted hundreds, if not thousands, of applications for consumption on premises licenses for entities that sell items beyond those identified in the Rule.”

And Newton noted “restaurants customarily sell items other than those listed in the Restaurant Rule. At a minimum, they sell T-shirts and branded souvenir items.”

The judge also denied a petition to intervene by ABC Fine Wine & Spirits, the Florida Independent Spirits Association, and Publix Supermarkets.

Their attorney previously has said rule challenges should not be used to “get around laws that a party does not like.”

Doing so “usurp(s) the legislative process,” said William Hall of the Jones Walker firm.