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Malloy Proposes Sweeping Changes To CT’s Liquor Laws

by Christine Stuart | Jan 14, 2012 4:44pm
(4) Comments | Commenting has expired
Posted to: Business, Town News, Enfield, Jobs, State Capitol

Christine Stuart photo

Gov. Dannel P. Malloy, with Rep. Kathy Tallarita and Sen. John Kissel of Enfield in the background

Surrounded by supporters at Enfield Town Hall on Saturday, Gov. Dannel P. Malloy unveiled a liquor law reform package that will allow for Sunday sales and a whole host of changes to how wine, beer, and liquor are distributed and regulated in the state. The governor said the proposed changes will allow Connecticut to compete with surrounding states in the liquor market.

“Over a relatively short period of time we will be pro-consumer, not just because it gives the right to buy when and where the consumer wants, but ultimately we are removing things in our current law that have worked to increase the cost of spirits, and wine and beer in our state,” Malloy said.

One industry expert estimates that Connecticut has lost $570 million in sales across its borders, but it’s difficult to know exactly how much the state loses.

He said he’s mindful that these proposed changes, which will have to be approved by the legislature, will have an adverse impact on some people’s business.

“That’s why this is more than just a Sunday sales proposal,” Malloy said. “That’s why we have moved the state in the direction of establishing a medallion system, so that the smaller shops that currently exist can be assured of a marketplace for what they have.”

But some may view the new medallion system as a severance package to some smaller liquor stores looking to get out of the business.

Malloy said he didn‘t see it that way.

“What it does on the medallion side is allow the movement of liquor stores and liquor licenses in the state subject to local zoning,” Malloy said. “This will allow for adjustments in the marketplace.”

Every current package store owner, there are 1,228, will receive a medallion and they will be able to transfer the medallion to a new town or sell it if they wish on a statewide basis. The proposal also increases the two package store limit to nine without increasing the number of permits for stores that currently exist.

Malloy’s proposal gives package store owners, who could have trouble competing on the beer side with grocery stores, an option to sell more than just cigarettes, bar utensils, and lottery tickets. They will now be able to offer snack foods and hors d’oeuvres. And it will give grocery stores the option of purchasing a medallion to open up a package store if they choose and would give some convenience stores the option to sell beer.

“What I’m saying to owners of shops is we’re working with you,” Malloy said.

Dominic Alaimo, owner of Freashwater Package Store in Enfield, who has seen his sales disappear over the border to Massachusetts, said it’s not the increase in the excise and sales tax last year that’s impacting his business. He said it’s his inability to open on Sundays and keep longer hours. He also applauded the elimination of minimum price posting.

Malloy’s proposal will allow package stores to stay open until 10 p.m., instead of 9 p.m. and it will also give them the ability to receive quantity discounts from the distributors, and eliminate the minimum markup currently dictated to retailers.

Jay Hibbard, vice president of the Distilled Spirits Council, said taxes change all the time, but the package Malloy put forward Saturday is a package of far reaching proposals which will have a long term effect on the marketplace.

Hibbard said his organization supports the package of proposals put forth by Malloy on Saturday and believes the governor’s support will go a long way toward making them a reality.

But some package store owners believe the increase in the excise tax and the sales tax have impacted their business, more than Sunday sales will help them.

Mary Patenaude, who has owned the Pomfret Spirit Shoppe for 33 years, said she doesn’t think Sunday sales will increase revenue to the state. She believes people will still head over the border to Massachusetts for their booze because the Commonwealth removed the sales tax on liquor in 2010.

“I think once this new system is up and running and we can judge the increase in income then we’ll be in a position to adjust the taxes as well,” Malloy said when asked about the increase in liquor taxes.

“Quite frankly I had a $3.5 billion problem,” he said defending the tax increases. 

With the state’s budget woes at the top of his list last year, Malloy sat on the sidelines and said he would sign a Sunday sales bill if it passed, but wasn’t going to get involved in the debate. This year he has had more time to think about it, which is why he offered the proposal Saturday.

“We can drive additional income to the state at the same time as we drive the price down to consumers. That’s known as a win-win,” Malloy said.

Carroll Hughes, the head of the Connecticut Package Store Association, said he met with the governor Saturday to go over the proposal, but has yet to form an opinion about it.

“It sounds good on paper, but I just don’t know how it’s going to work,” Hughes said. “I don’t know what all those things will do collectively.”

He said he’s taking it to the board of the association for discussion over the coming week.

Rep. Kathy Tallarita, D-Enfield, a longtime proponent of Sunday sales, said the backing of the governor will go a long way toward making sure the proposal becomes law.

She said there have been Sundays where she’s driven to Massachusetts to purchase beer or wine for a party and is excited at the opportunity to stay in the state to purchase it and keep the money here within the borders.

“It allows small businesses to create jobs and bring in more money to the state of Connecticut,” Tallarita said.

Stan Sorkin, president of the Connecticut Food Association, said the grocery store owners he represents support the package and believe the governor’s support will go a long way to making sure it’s passed.

Grocery stores which currently hold beer only permits would be allowed to purchase package store medallions, but they wouldn’t be able to sell wine or spirits for at least five years.

Malloy said his main goal in proposing the package was making sure Connecticut remained competitive with its neighboring states.

The ban on Sunday liquor sales “is reflective of another time and another age when people lived differently,” Malloy said. “There’s a whole lot of people who have to work all day Saturday and can’t get to a store.”

He said all the other states have recognized that because all but Indiana have Sunday sales.

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(4) Comments

posted by: bwg102 | January 14, 2012  5:37pm

I’m glad to see that Gov. Malloy realized that this was something much bigger than Sunday sales.  While I don’t agree with all his suggestions, the pricing system was in dire need of a restructure.  When the retail price of liquor at Yankee Spirits is lower than a package store owner’s cost of goods, how can border towns compete?  With the elimination of minimum bottle prices and, hopefully, other price changes such bulk discounts or a revision of the current posted price system, package store owners may finally have the tools available to compete with our neighbors over the border and actually WANT to open on Sunday!

posted by: ... | January 14, 2012  6:06pm

...

The Sunday Sales generally has a lot of dvisisiveness among the major industry reps. But with a more comprehensive package that provides winning policy reforms on all sides, it smartly makes this bill something tough for either party to fiercely argue against without a rebuke from fellow members.

posted by: Disgruntled | January 15, 2012  10:56am

HIC! Now that’s competition! Dan is lowering the bar (pun intended) and pulling ahead of The Hoosier State where AMAZON has more than a few sober employees working Sunday’s to enhance state tax revenue after last week’s deal.
I look forward to not having to cross the border but,come on! A five year wait to buy my suds at the grocery store?! My liver won’t see that happening. What are we waiting for,shelf space to open up?
A two store limit increased to nine and hor d’oeuvres makes me queasy but the proof will be in pricing. When I can buy my favorites for the same price or less in Connecticut,with the same selection,as I can in NJ or NYC I will become a convert. In the meantime this smacks of more of the same. Headlines and facetime.
Keep trying Dan.

posted by: ... | January 15, 2012  5:59pm

...

I feel your pain on the prices Disgruntled. Being a student who travels, prices even in PA and OH are significantly cheaper.