Indiana Supreme Court rules against Monarch Beverage in bid to sell liquor

Monarch Beverage Co. has been dealt another major blow in its years-long push to distribute liquor in Indiana, this time by the state Supreme Court. 

In a unanimous decision Friday, the court ruled against Spirited Sales LLC, an affiliate company created by the state's largest beer and wine distributor to get around Indiana's alcohol laws. Indiana is the only state that does not allow wholesalers to distribute both beer and liquor. 

Although the affiliate is a separate company, the state's highest court found that Monarch and Spirited are not separate enough.

The decision follows a June 30 ruling by the 7th U.S. Circuit Court of Appeals on a separate attempt by Monarch to distribute liquor. The Indianapolis company argued that Indiana's policy of separating beer and liquor wholesaling violated the Constitution's Equal Protection Clause. A federal district court disagreed, and the Appeals Court affirmed that decision.

IndyStar has reached out to Monarch Beverage officials for comment. 

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Monarch came close to obtaining the legal ability to distribute liquor in August 2016 when Marion Superior Judge Heather Welch ordered the Indiana Alcohol and Tobacco Commission to grant Spirited a wholesale liquor permit. Welch said the commission "acted in an arbitrary and capricious manner" when it denied Spirited's permit request.

After Welch's ruling, former Indiana Attorney General Greg Zoeller petitioned the Supreme Court to hear the case, and in the end, the high court pointed to the ownership of the two companies.

According to the 16-page decision Friday, Spirited is registered in Delaware as a limited liability company that is wholly owned by a parent company called E.F. Transit Inc. 

E.F. Transit's ownership consists of the same five shareholders who also wholly own Monarch.

"There can be no doubt that Indiana is empowered to do what the Commission has urged here – which is to bar companies with same ultimate owners from simultaneously holding both beer and liquor-wholesaler permits," Justice Steven David wrote in the ruling. 

The high court steered clear of weighing in on the merits of the state's unique alcohol laws.

"We recognize that businesses have long lobbied this very contentious point before our General Assembly, and will likely continue to do so, but deciding whether the regulatory scheme in place is still relevant or still necessary or in need of overhaul are matters to be resolved through the political process, which we trust would take into account the policy arguments made by opposing sides on this issue.

"As for today’s decision, it rests purely on our interpretation of the statute’s language,
which we believe is clear on its face."

Tina Noel, a spokeswoman for Wine and Spirits Distributors of Indiana, said Friday's ruling reverses the only judge that has ever ruled in Monarch's favor. She added that she hopes this is the last stop for the distributor.

"The Indiana Supreme Court joins the United States Court of Appeals for the 7th Circuit and the Indiana Court of Appeals in rejecting the company's assault on the Indiana General Assembly's and the Alcohol and Tobacco Commission's authority to regulate alcoholic beverages," Noel said in a statement. "We certainly hope this is the end of Monarch's efforts to undermine the legislature and create a regulatory environment where anything goes.  

"Monarch has been unsuccessful at the legislature, at the commission and now, yet again, in the courts.  Perhaps the state can finally spend its limited resources on more pressing issues than a company that's aiming to monopolize an industry." 

Call IndyStar reporter Justin L. Mack at (317) 444-6138. Follow him on Twitter: @justinlmack.