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OP-ED | Panic Sets In Among Package Store Owners

by Terry D. Cowgill | Mar 1, 2013 6:30am
(2) Comments | Commenting has expired
Posted to: Business, Economics, Opinion, Taxes

Nine months after modest reforms were enacted in the way alcohol is sold in Connecticut, the prevailing mood among most package store owners in the state can be summed up in one word: panic.

Last year, Gov. Dannel Malloy persuaded the General Assembly to take some baby steps in treating the liquor industry more like just about every other industry in the state. Package stores can now open on Sundays and most holidays. Supermarkets can sell beer on Sundays instead of covering their coolers with dusty tarps. Prohibition on Sabbath sales has been lifted. Hallelujah!

And yet most store owners interviewed in Sunday’s Courant moaned about the added expense of staying open an extra day without a proportionate rise in sales. Solution: if opening on Sundays isn’t worth the expense, then stay closed. “Oh no, we can’t do that,” they counter. “We would lose beer business to the big supermarkets who are open seven days a week.”

Imagine that. You mean package store owners would actually have to compete for customers the same way a small-town hardware store competes with Home Depot? Or the way the corner barber competes with haircutters at the shopping mall? Welcome to the real world, folks!

For decades, Connecticut’s 1,150 package stores have been treated as a protected retailing class. A set of archaic and anti-competitive laws, some dating back to Prohibition, have mostly barred the stores from offering sales items, bulk discounts, and snack foods. And supermarkets can’t sell wine or liquor either. Unique among the outrages is a repressive system of minimum pricing for each bottle of wine and liquor sold. Of course, the package store owners love it because they don’t have to compete with one another. Consumers, however, are getting ripped off.

As Malloy pointed out to me in an interview a year ago, a typical $15 bottle of California Cabernet at Yankee Spirits in Sturbridge, Mass., cannot be sold for less than $22 in Connecticut, not including sales taxes. And that bottle can be bought for even less in the Bay State if you buy it by the case, a discount that is not even allowed in our state.

Mercifully, the governor is once again proposing to get rid of above-cost minimum pricing. But not if the package store owners who showed up at Tuesday’s public hearing of the General Law Committee have their way.

At the hearing, many of the owners and their apologists in the legislature quickly tried to change the subject from minimum pricing to Connecticut’s liquor taxes relative to other nearby states, especially Massachusetts. Yes, it’s true that the Bay State has no sales tax on alcohol and a lower excise tax than Connecticut. But that doesn’t even begin to make up for the pricing chasm between us and neighboring states. The invocation of the tax difference by the package store owners and their lobbyists was nothing more than an attempt to distract attention away a price-fixing scheme that would be considered illegal in almost every other retail sector.

Thankfully, the Connecticut Package Stores Association may have met its match in a wine and liquor superstore chain that established its first Connecticut store three months ago in Norwalk. Total Wine & More opened a 35,000-square-foot behemoth believed to be the largest of its kind in the Northeast. Total Wine has also hired lobbyists and former television journalist Duby McDowell’s public relations firm.

When it tried to launch its store with a gala opening, Total Wine ran smack up against Connecticut’s absurd prohibition against having fun and saving money in a liquor store. The company wanted to have catered food and live music. Not allowed. Total Wine wanted to stock cigars wrapped in Connecticut tobacco leaves. No go; liquor stores in the Nutmeg State can sell cigarettes but not cigars. Total Wine wanted to have low prices and lots of sale items. No way. We can’t have that here.

For a taste of the civilized world, I don’t have to go very far. The Big Y supermarket in Great Barrington, Mass., has a full-service liquor store inside with highly competitive prices and an outstanding selection. That’s one-stop shopping at its finest. I travel out of state to go there every chance I get. Is that really what the Connecticut Package Stores Association wants?

I understand that some small liquor stores in Connecticut would likely close with the elimination of minimum pricing. But that’s hardly a good reason to punish the rest of us.

The central question legislators must ask themselves is whether the state’s package store owners should be protected at the expense of Connecticut’s 3.5 million consumers. The answer should be obvious to any rational human being. Then again, we are talking about the General Assembly here.

Terry Cowgill blogs at ctdevilsadvocate.com and was an editor and senior writer for The Lakeville Journal Company. He can be found on Twitter @terrycowgill.

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(2) Comments

posted by: Noteworthy | March 1, 2013  9:30am

Exactly right. This protected class needs to compete for our business like everybody else. There is no reason why we have to pay more - and while they’re at it, look at the tax structure too. Connecticut is simply not competitive on any level. And they should be allowed to sell cigars too. OOps..can’t buy them anymore since CT Legislature and Malloy decided they need a 30% tax on cigars. Sorry.

posted by: avenge69 | March 6, 2013  8:50pm

While you’re correct that everyone, large and small, will now have to “compete” for business, I can’t help but think of how our Democrat Governor fights for the poor and middle class. Now the owners of the “mom and pop” liquor stores could probably be considered…............middle class? So how much of the $115 million Malloy gave to bridgewater hedge fund will help these middle class shop owners out? For all the spewing our governor does about wanting to protect the middle class he sure does the opposite when it comes to his actions. I am all in favor of competition, but I see these small liquor store owners being thrown to the wolves when they have to compete with the large liquor chains. Malloy has got to be the absolute worst governor this sad state has ever seen. Governor Malloy is exactly the reason why business will continue to escape this state and leave it’s residents out in the cold when it comes to jobs. Ct is on the bottom of the pile when it comes to job growth but we are number one when it comes to utility rates, gas tax, underfunded pensions, and debt per resident. Great job governor! (yes, I realize that the prior admin left a financial mess, but can anyone say Malloy is doing this state any good with a straight face?)