Walmart is suing the Texas Alcoholic Beverage Commission over liquor laws in the state.
Currently, the conglomerate can't sell hard liquor in Texas, to the delight of local liquor store owners.
"If they're literally a block or maybe a mile away, it would definitely affect us," said manager of Chris's Liquor Store David Guerrero.
Walmart said Texas laws discriminate against publicly traded companies.
In a statement, a spokesperson for Walmart writes: "Walmart believes the law needs to be changed to provide a fair and level playing field so we can offer our customers a full assortment of adult beverages as part of a convenient and comfortable shopping experience."
In order to sell packaged liquor, Texas law requires businesses to obtain a package store permit. Publicly traded companies are not allowed to purchase those permits.
"They may agree we need more free market, but that law's here to protect small businesses," said Guerrero.
Even if they could buy the permit, under Texas law companies are not allowed to own more than five package store permits in the state, but there are some loopholes.
If the package store permit was originally issued before May 1, 1949, or if family members pool their permits together, they can have more than five. Walmart doesn't qualify for either exception. The staff at Chris's Liquor Store hopes it stays that way.
"They will be able to have cheaper prices than we can because we only have a certain amount of space and we can't compete with their prices," said Guerrero.
The Distilled Spirits Council of the United States responded to the lawsuit in a statement that reads: "We have long believed spirits retailers should be able to operate under the same regulations as other alcohol retailers in regard to hours of operation, ownership caps and organizational structure."
Local liquor store owners said if Walmart wins the lawsuit, it's small business owners in Texas that will lose.
"It's really just unfair. It really hurts the little guy," said Guerrero.
The Texas Alcoholic Beverage Commission said they cannot comment on pending litigation.
If Walmart does win the lawsuit, they said they will build a liquor store next to existing stores. That way they can comply with state liquor sale laws.