OP-ED | Minimum Pricing: Deliver Us From The Scourge
The headline in the Feb. 7 Danbury News-Times said it all: “Liquor shop owners wary about calls to nix minimum pricing.” No kidding. As people in the liquor industry outside our state are fond of saying, “Only in Connecticut.”
In case you didn’t know it — Connecticut has the most oppressive and anti-competitive laws governing the sale and distribution of alcohol in the country. It punishes the consumer in the name of protecting an entire class of retailers — mostly mom-and-pop package store owners — from meaningful competition.
Since his inauguration, Gov. Dannel P. Malloy has made reform of these laws a sort of mini-crusade, much to the chagrin of the Connecticut Package Store Association, a powerful lobbying group whose members want to protect their sweet but indefensible deal.
Three years ago Malloy achieved what many thought would be impossible: allowing the package stores and grocery stores to sell alcohol on Sunday. The package store owners fought back, but in the end they realized ignoring consumers with laws dating back to the Puritans would not fly. So they surrendered in exchange for maintaining minimum pricing, which only dates back to Prohibition. Another provision in that legislation raised the number of package store permits a proprietor may own from two to three. Baby steps.
Last year Malloy signed new legislation extending sales at the end of the day by one hour to 10 p.m. (6 p.m. on Sundays), as well as stiffening laws against drunk driving and banning the sale of powdered alcohol, an imaginary scourge if ever there was one.
When I, along with the rest of the CTNewsJunkie editorial board, interviewed Malloy in December in his Capitol office, I asked him if he would deliver us from the scourge of minumum per-bottle pricing and seek what I facetiously call “liquor justice” — a lighthearted term to describe the unfairness of our laws.
“I would do away with it if it was within my authority,” he said, referring to minimum pricing. Asked if would pursue any more initiatives this term, he added, “I usually try something every year.”
This looks like a case in which a politician has actually underpromised. It remains to be seen, however, whether he can overdeliver. With Malloy’s support, several lawmakers are proposing to abolish minimum pricing but they will surely have a battle on their hands.
The idea has prompted the usual handwringing among small package store owners and their representatives. Their chief lobbyist, Carroll Hughes, insists the free market will result in less revenue to the state. If the price per bottle is lowered through the abolition of minimum pricing, then the state’s 6.35 percent sales tax will collect less revenue from the sale of each bottle, he claims.
The logic is almost laughable. If Connecticut’s liquor laws weren’t so punitive to its residents (retail prices runs 15 to 20 percent higher here), fewer of them would make the trip to Yankee Spirits in Sturbridge, Table & Vine in West Springfield or, in my case, Domaney’s in Great Barrington. Common sense tells us that increased sales would more than make up for the sales tax losses caused by the lower prices. And it looks like Hughes has finally given up on insisting that the only reason for the current difference in retail pricing between the two states is that our taxes are higher. More baby steps.
As for Hughes’ dire prediction that half the state’s 1,150 package stores would go out of business if they actually had to compete with one another, I would ask him the following: how does the mom-and-pop convenience store compete with Stop & Shop, the local hardware store with Home Depot or the corner barber with the 10-chair hair-cutting shops at the mall? Answer: by offering superior customer service and a more knowledgeable staff.
And Hughes’ assertion that the move to reform is really designed “to get the Wal-Mart of package stores to put the others out of business” is nothing more than scaremongering. Note his use of the much-reviled big-box retailer to get our blood boiling. Are you angry yet?
Let’s cut to the chase. There is no defensible reason for maintaining minimum pricing, placing strict limits on sales items, and retaining the rest of the state’s archaic laws governing the liquor business. The only reason it’s being done is because package store owners have succeeded in establishing themselves as a protected business class.
Just another example of why it’s a bad idea for the government to be in the business of picking winners and losers.
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