The state is fighting a court order that would require it to grant a wholesaler permit to Spirited Sales LLC, a company affiliated with Monarch Beverage that wants to sell liquor.
Attorney General Greg Zoeller said he will ask the Indiana Supreme Court to put on hold a lower court ruling that said the Alcohol and Tobacco Commission was “arbitrary and capricious” in its decision to deny the company’s wholesale liquor permit application in 2014.
Zoeller said he’ll also ask the Supreme Court to consider the larger issues in the case.
The state argues the alcohol commission rightly denied the Spirited Sales permit because state law prevents Indiana alcohol wholesalers “from directly or indirectly having an interest in both a beer wholesaler’s permit and a liquor wholesaler’s permit.” Indiana is the only state with that kind of restriction.
Monarch lobbied the General Assembly unsuccessfully for years to change that law and filed lawsuits to try to overturn it. When that didn’t work, Monarch’s shareholders created Spirited Sales.
Spirited is wholly owned by EF Transit Inc., which provides transportation services to Monarch and other companies. The same shareholders that own Monarch also own EFT.
EFT and Monarch also share the same CEO and board of directors, but their day-to-day operations are separate. They have distinct alcoholic beverage permits, maintain separate insurance, keep separate financial books, and have separate bank accounts, tax returns and payrolls.
The commission argued that giving Spirited a liquor license when its owner is a closely held organization owned by the shareholders of Monarch would violate state law and present a threat to Indiana’s system of wholesaling and distributing alcohol.
Marion County Special Judge Heather Welch disagreed. In a decision severely critical of the alcohol commission and the administration of former Gov. Mitch Daniels, the judge found a “disturbing and inappropriate” relationship between the ATC, the Indiana Governor’s Office and Monarch’s rivals in the liquor wholesaling industry.
The ruling said those parties appeared to lobby the commission behind the scenes for the denial of the permit and other requests from Monarch dating back to at least 2009.
But Zoeller said decisions about alcohol policy should not be made in a local court.
“There have been many attempts to change Indiana's statute regulating the sale of alcohol in our state Legislature where this policy belongs,” he said in a written statement. “While I respect the trial court’s work on this complicated case, a judicial change to the state's policy requires the Indiana Supreme Court’s review.”
Zoeller also said the decision to allow Spirited to sell liquor along with beer puts the “marketplace in limbo and only serves as a detriment to preserving the status quo.”