CADENA COMERCIAL USA CORP. D/B/A OXXO, Appellant v. TEXAS ALCOHOLIC BEVERAGE COMMISSION, Appellee
Cadena Comercial USA Corp. d/b/a OXXO challenged an administrative order from the Texas Alcoholic Beverage Commission (TABC) denying its application for a wine and beer retailer's off-premise permit. The TABC's denial was based on "tied house" prohibitions in the Texas Alcoholic Beverage Code, which aim for "strict separation" between manufacturers, distributors, and retailers to prevent overlapping ownership interests. Cadena, a wholly owned indirect subsidiary of FEMSA, was found to have a prohibited cross-tier relationship because FEMSA also holds a 20% stock interest in Heineken brewers (manufacturers). The court affirmed the administrative order, holding that the term "interest" in the statute broadly encompasses any commercial or economic interest providing a stake in the financial performance of an entity in the alcoholic beverage industry, and a "control" standard is not required. The court also rejected Cadena's arguments regarding constitutional vagueness, equal protection, and the inapplicability of veil-piercing principles, concluding that FEMSA's significant financial interest at multiple tiers violated the strict separation mandate.