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Malloy Modifies Liquor Package

by | Feb 27, 2012 6:25pm
() Comments | Commenting has expired
Posted to: Legal

Hugh McQuaid file photo

On the eve of a public hearing over the governor’s proposed reform of the state’s liquor laws, the Malloy administration recommended some changes aimed at addressing package store owners’ concerns.

While the revisions do not impact Gov. Dannel P. Malloy’s plan to legalize the sale of alcohol on Sundays, they do make compromises on other provisions, which some owners found to be more troublesome.

Last week, Bill Fore, president of County Wine and Spirits in New Preston, said Malloy’s original plan to eliminate the state’s minimum pricing requirements and allow bulk discounts would drive mom-and-pop stores out of business.

That’s because a large store getting a bulk discount could make a healthy profit selling products at a price below what Fore said his shop would be paying wholesale.

Under the proposed changes, retailers would not be able to sell a product for less than they paid for it. In a phone interview Monday, Fore called the change a “commendable compromise.”

“It’s sort of a half measure because what it does is still allow a large store to buy at a lower price and have a lower cost of acquisition,” he said. “We would still like to see a minimum price so we can all compete on a level playing field.”

Malloy’s original bill also had proposed raising the number of stores an owner could operate from two to nine. The revised bill caps the increase at six, allowing owners to purchase one new store per year beginning in October.

Fore also had expressed concerns over the proposed package store licensing, or “medallion,” system. Malloy’s original bill would have eliminated current language which only allows one liquor store per 2,500 people in a town. That caps the number of stores in a town, which in turn makes a store owner’s business more valuable, he said.

The governor had planned to issue to package store owners a medallion for each store. The medallions could then be bought and sold on an open market. A medallion could be used to open a store in any town. Fore said that would have devalued store owner’s assets by allowing more stores per town.

Under the recommended changes, the medallion system would still be in place. However, the bill would preserve the one-store-per-2,500-residents cap. Fore called the change “terrific.”

“I’m very pleased because it does help protect the assets of businesses and that’s a very good thing,” he said.

Malloy’s original plan also proposed to eliminate the posting of prices at the wholesale level. Without posted prices there is very little way to make sure everyone is playing fairly, Fore said.

“These are very positive changes and I have to say I’m very pleased to see this is going on,” Fore said.

The changes reinstate wholesaler price posting but remove a process by which the prices can be amended after they are posted.

Fore said other changes make sense but may be tough to enforce, like a provision that allows retailers to pick up to five items and sell them at 10 percent below their acquisition cost.

“It provides a way to do clearance sales for things they need to get rid of,” he said. “But it may open the door for abuse because there’s no way to monitor it very well.”

A public hearing on the bill is scheduled for 11 a.m. Tuesday before the General Law Committee at the Legislative Office Building. Carroll Hughes, the head of the Connecticut Package Store Association, who was unable to be reached for comment Monday, said last week that he expected as many as 1,500 package store owners to come to the hearing.

A rally in support of the bill also is scheduled for 10 a.m. on the steps of the state Capitol building.

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Comments

(5) Archived Comments

posted by: ... | February 27, 2012  8:23pm

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Compromise is what counts and it seems everyone will be able to walk out with a bottle smiling, no matter what day of the week it is (as long as its between 10am-8/9pm).

posted by: Irish Loop | February 28, 2012  10:23am

I don’t understand why Malloy is bowing to the liquor store lobby.  Everybody supports these provisions.  And most types of businesses are not protected from competition by the government.  It’s unfortunate that many liquor stores find they won’t be able to compete with personality and service, but I simply do not understand government’s role in making sure package stores are kept viable through government interference.

posted by: SocialButterfly | February 28, 2012  11:16am

Let’s wait until after the public hearing, to get a better handle on the issue.

posted by: StunningContradiction | February 28, 2012  11:54am

@steven jones: Compromise is NOT what counts, principle is what counts.  Compromise is the abandonment of your belief system and is inherently immoral.

@Irish Loop: you wrote that “types of businesses are not protected from competition by the government” but you’re wrong. Licensing affects most kinds of businesses and licensing rules are used to raise the barrier to entry for new businesses.  They’re nothing more than government favoring one business over another in the guise of consumer protection.  All government licensing is anti-business and should be abolished.

I’m astounded that the governor even proposed lifting so many of the existing restrictions and it’s unfortunate that the original proposal is having to be watered down.

posted by: ... | February 28, 2012  2:06pm

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Good for you Stunning Contradiction. I’m sure you’d fit right in with the founders of our nation in establishing our legislature (oh wait, that was deemed the Connecticut ‘compromise’, understanding that the betterment of the nation and society is better than saying ‘I’m right, you’re wrong, and I won’t hear any more of it’).

Sunday sales and liquor reform has allowed for decades of protectionist measures for business on behalf of the legislature, disregarding the original intent was a form of religious restriction to the citizens freedoms. And the principle of this law is to not just cast that outdated doctrine aside, but to push forward reforms that can get the most votes.