If you were hoping to pick up a cold one at an Indianapolis convenience store on your way to a holiday party this weekend, think again.

The Seventh Circuit Court of Appeals recently issued a decision in Indiana Petroleum Marketers & Convenience Store Association, v. Cook, holding against grocery and c-store operators looking to sell cold beer in Indiana. On the one hand, Indiana Petroleum is a blow to advocates of more dynamic alcohol markets. It props up yet another antiquated alcohol law and denies consumer freedom for another day. On the other hand, the decision was not wholly unexpected.

Under existing Indiana statutes, while grocery and c-store operators may be licensed to sell beer to go, only package stores may be licensed to sell cold beer to go.  Indiana argued that this distinction is constitutionally permitted since only legal consumers over 21 are permitted to enter Indiana package stores and anyone can walk into a grocery or c-store. The court ultimately agreed that the cold beer distinction didn’t rise to the level of a violation of the federal Equal Protection Clause of the Fourteenth Amendment.

It props up yet another antiquated alcohol law and denies consumer freedom for another day.

Taking in the broader view and the range of protectionism utilized by states to keep out-of-state businesses from acquiring licenses to sell alcohol, Indiana Petroleum doesn’t look like an ideal test case, because: (1) the plaintiffs already had the right to sell beer, just not cold beer; and (2) the federal Equal Protection Clause is ordinarily not the ground a business would choose to stake a constitutional claim.

Retailers stand far better odds of winning constitutional challenges where:

  • They’re out-of-state businesses;
  • They’re willing and able to comply with local alcohol laws;
  • They’re arbitrarily denied the privilege of selling alcohol;
  • Local businesses are being protected against competition; and
  • The state has no compelling reason for the disparate treatment.

In other words, Indiana’s cold beer rule isn’t the most compelling target for a constitutional challenge.  There are numerous more vulnerable states, and the best ground to make the case is the federal Commerce Clause—which is, after all, intended to guarantee free interstate markets.