This is the Cato Daily Podcast for Tuesday, July 7th, 2015. I'm Caleb Brown.

They do things bigger in Texas, including special favors for powerful interest groups.

In the burgeoning world of craft beer, Texas protectionism will face off against

the Institute for Justice over the government taking a valuable asset, the right to sell

rather than give away beer distribution rights.

A Reef Pongue is an attorney for IJ.

We spoke last month.

Three craft beer companies have teamed up with IJ to ask a very simple but profound question and that is can the state of Texas

seize valuable property from craft breweries and simply give it to beer

distributors even though those distributors have not earned it and don't deserve it.

The simple answer to that question is no.

And we've challenged a 2013 law that strips breweries of their traditional right to sell their distribution rights, an

exclusive territorial right to distribute their beer.

And this law instead forces them to surrender those rights to

distributors without compensation. In order to understand this properly because

it is dealing with alcohol, alcohol just has a very strange set of regulations surrounding it when it comes

to how the booze gets from the producer to the consumer.

When a prohibition ended in 1933, states passed laws creating what is known as the three-tier

system for regulating the distribution of alcoholic beverages.

Under this system, distributors and retailers, the three tiers of the supply

chain, along with distributors, must remain independent from one another. This means that a business that is in one tier cannot

operate in another tier and they cannot share an ownership interest or

...