Helpful or Not? Malloy Proposes Changes in CT Liquor Laws to Help Consumers

13 Feb

It’s amazing to think that just a while ago there was no such thing as buying liquor, beer, or wine at your local shop on Sunday or holidays. But, Governor Dannel Malloy changed that when he announced some sweeping changes helping Connecticut to finally not be one of the last states to be closed on Sundays. Well, if he has his way, there will be even more expanded hours and a few other changes to how consumers and owners are able to hold down their liquor in every sense of the word. All of these propositions were made during the Chaz and AJ show this morning.

First up, Malloy would like to extend hours Monday through Saturday from 8 am to 10 pm and from 10 am until 8 pm on Sundays. We can’t tell you how many times we’ve been shopping on a Sunday, wanted to pick up a beer, but wahh wahhhhh, we couldn’t buy it because shops were closed or that annoying plastic film has been lowered over the beer in the grocery aisle. You know what talking about! For the consumer, this is a giant win, although it might create some problems and force local retailers to make many changes and even hire more people. 

Secondly, Malloy wants to remove the Minimum Bottle Law. This was put in place to help keep businesses competitive, but to also ensure that stores are making a profit on sales. By removing this law, stores can set their own price, even dropping it below retail price, but never lower than the actual cost. Many see this is a win for the consumer because stores will be competing against each other to help bring you the best price. 

But, there are many who are saying that this move could actually cause many local businesses and retailers to lose money and possibly close. The thinking is that the large stores such as Total Wine in Norwalk can set the lowest prices in the area and would create a flood of customers who want to buy their beer, wine, and liquor. While Total Wine gains customers and profits, the local shops get less business and would then need to make tough decisions. Will they sell their liquor just as cheap and not take in any profit, or would they raise their prices to make up for some of the losses? And, if they do raise their prices, what if less people start shopping there . . . or if they set very low prices, how long can they do that before they start losing major money? The end game in this scenario has the big box stores closing out local shops then jacking up the prices because there isn’t any more competition around. 

Yes, many will see that this is a free market and that the best, most successful businesses that market to the consumer survive and rise to the top, yet there is definitely more to this. Making this even more complicated is the next proposition from Malloy that will raise the cap on liquor store ownerships from three to six. Again, this could be a great thing for local business owners who have seen successful growth and want to expand their business into other parts of town or even in other areas.

But, it also brings up a similar question to the last issue: what about the big box stores? Theoretically under this ruling Total Wine (we hate to keep using them as an example, but they’ve actually made their intentions very clear from the start) or similar stores could buy six stores throughout the state. This could very well push even more businesses to the brink of closing and force out many locally owned, mom & pop shops. 

Malloy finished his interview by saying that his proposals have been approved during a recent legislative session, but it’s not clear how the public and owners will react. From our perspective, it would seem good to the consumer to have competition, thus helping bring about lower costs and more opportunities to pick up beer, wine, and liquor. But, we seriously need to think about at what cost? Will these changes actually be better for businesses and CT? 

What are your thoughts?

11 Responses to “Helpful or Not? Malloy Proposes Changes in CT Liquor Laws to Help Consumers”

  1. Bob March 5, 2015 at 3:36 pm #

    I would seem that Gov. Malloy has friends at Total Wine as he is again trying to alloy Total & other chain stores to expand & curtail smaller businesses. The task force he commissioned in 2012 said there was no advantage to drop the min. bottle price … it offered no further revenues & that the price before taxes was very competitive with our neighboring states. So why would he try again would lead me to believe his connection to Total Wine & others … here is a copy of my letter send to state officials …

    I find it deeply disconcerting when an elected leader of the good State of Connecticut favors big business in lieu of all the hard working middle class constituents that are trying to make ends meet. The Governor’s true agenda, hidden behind a vail of misrepresentations & buzz words, became obvious as his proposed changes disregards the task force findings of 2012 that he commissioned and aligns with the expansion of large liquor (i.e. Total Wine) & grocery store chains (Costco, Stew’s, etc.) into areas already serviced by other, smaller, package stores. Does the government work for the people or for large corporations?

    The $3.3 million in revenue per year the Governor believes these new liquor policies will generate is totally inaccurate. The changes he’s suggesting will actually decrease revenue, hurt the small business owner, and curtail consumer selection of product. The repeal of minimum pricing will shift revenue from the small package store to the larger stores by using predatory pricing to increase its market share. So in other words … it will yield lower sales volume as the consumer will not buy more (consumes same quantity) leading to less revenue for the state as the sales tax collected is lower! That’s simple math! It will cascade down to stores closing & distributors cutting back on sales people which will inevitably lead to more unemployment & less state taxes collected in the long run. So his figure is totally fabricated! Another example of his misrepresentation was the increase of revenue from opening on Sunday’s. The fact is Sunday opening simply shifted package store sales from Friday & Saturday to Sunday while in some cases sales in the large grocery stores stole beer business from neighboring package stores. Connecticut residents were not running to other states on Sunday … unless it was for Yuengling Beer which is finally available in Connecticut. I will comment of each of his proposals below.

    1. Repeal of Minimum Pricing:
    • His comment of “Gouging” the consumer is one of the veils hiding his true agenda. The facts are simple & can be proven. Connecticut sales and excise taxes are higher than surrounding states (MA and RI have no sales tax on alcohol) which accounts for the price discrepancy. Our prices, before taxes, are actually competitive with surrounding states. I live in NY and can attest that Ct. prices are lower on a vast majority of products!! Again he is twisting & misrepresenting the facts to the public to get support for his injudicious proposals. If the government doesn’t want to “gouge” the consumer, it can repeal the sales tax & lower excise taxes!

    • Repealing minimum pricing abolishes the “level playing field” that exists today between all the liquor stores. Repealing it would allow out-of-state big-box retailers to initiate “predatory pricing” and use loss leaders to drive out local packages stores. Look at the stores that apply to the state for discount pricing limited to 10% below cost. How many are small package stores … most if not all are large retailers. Just think how many more products will be discounted if not controlled. Their advantage today is that they carry more product & we compete based on service and selling less known wines – so it levels out. Tax revenues will definitely fall as consumers will end up paying less & once they dominate the market, pricing will go back up as competition is eliminated. Economics 101 !!!!

    • CT has a vast selection of some of the best boutique spirits, wine and beer in the country and all those brands will be gone if big-box retailers are allowed to dominate the market. The large retailers bottle & distribute their own brands (Total Wine, Stew Leonard’s, Fairway, Costco, etc.) unknown to most consumers. Their salespeople are commissioned to point them in that direction once they enter the store. The consumer will not have the vast selection of product now available and most small wineries will fail.

    • The task force set up in 2012 to look at minimum pricing (with appointees of all stakeholders including from the Governor) did NOT suggest minimum pricing leads to higher prices and instead acknowledged that our taxes are higher than surrounding states. So ask yourself … why bring it up again!!!

    2. Increasing the permit amount to six permits:
    • This is obvious … This allows out of state corporations, big-box chain retailers to open twice as many that they have today to dominate the market and drive all the small, medium and large package stores out of business. Many people will become unemployed and store vacancies will increase. It’s a fact that Connecticut today has more liquor permits then MA!!! Ask yourself, or just take a drive, how hard is it to find a liquor store in Connecticut. They are located everywhere so why do we need more? It’s obvious what’s he’s trying to do!!

    • Permit limits exist for a reason and were extended from 2 to 3 in 2012. The corporations weren’t happy so they are trying again to expand into Connecticut … again, these proposals are only aimed at helping the chain stores at the detriment of the smaller package stores.

    3. Increasing the hours of sale to 10pm M-S and to 8pm on Sunday
    • There is no demand for this change except from food stores that want more of the beer business. I would think that most civilized people are home during the week by 9 pm …. All this will do is increase the risk of drunken driving accidents, or store owners being held up. It will also allow more under aged kids to buy beer as food stores are less likely to proof because the purchase will consist of other products along with the beer and the people behind the counter are most likely not to care or are not educated! What’s he thinking!!! Enough is enough!

    All I ask is that we keep the level playing field as it exists today and not give into big business. The Governor seems to have his allegiance with the large corporations at no benefit to the good state of Connecticut. Those that vote with him are making it clear that they are siding with large corporations and not the middle class worker whose only source of income & family livelihood is generated from that store. We can’t afford to take a back seat on this, it’s the small retailers and middle class that made America what it is today and this is not how they should be repaid! Please stand against these proposals and not be fooled by the misrepresentations or party tactics. It was already proven in 2012 by a government task force! There is no good to come from this proposal & I truly believe it is bad for the economy & for Connecticut.

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  2. Chris February 16, 2015 at 5:43 pm #

    Jason is absolutely correct. Beverage industry suppliers are under huge pressure to have their brands present in the big stores. Many suppliers will do “anything” to have their products in big stores. In many cases, the suppliers break the law and the State either turns a blind eye or just do not have the man power to enforce existing laws.
    The removal of low bottle will change the face of the industry in CT. Mom & pop stores will not be able to compete thus closing their doors creating the lack of convienience to the consumer. Wholesale will need less managers, salespeople, merchandisers, drivers, tasting models, etc.. All leading to higher unemployment. Less stores = less employees.
    The CT Governor seems to like to fight the Package Store Asso. and he seems determined. I truly hope he does his homework!
    What bothers me is: Molloy has started pushing for law changes around the time Total Wine wanted to come to CT.
    One last thing, if the state cannot enforce the liquor laws presently on the books, how will they enforce the new laws?

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  3. Ravi Patel February 14, 2015 at 3:20 pm #

    As a store owner i can tell you right now these things will kill my business, already the Sunday Business is terrible, his counter for that two years ago was that we can close if we want to we don’t need to stay open…the problem is that we have to. We don’t have a choice my customers will go somewhere else thus me losing a customer my business has suffered from sunday my saturday customer flow has been cut in half and monday has been even worse. Another thing is he said it create more revenue for the state!? which it hasn’t nothing has changed in the two years. Or that him saying taking away min pricing its the last thing a small shop like me can do to compete against a larger store. letting this happen will Create a monopoly there will only be 2-3 large liquor stores in an area he will be killing businesses hows that helping ct?

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    • Dan and Kristien Del Ferraro February 14, 2015 at 5:39 pm #

      Thanks for commenting, Ravi. To say you should just close Sunday is obviously not any kind of solution. You’re right: if you don’t stay open, people will go somewhere else. You might lose some steady customers when you stay closed.

      What do you think of later hours? Do you think they could help or will it just be another strain on things?

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      • Ravi Patel February 15, 2015 at 12:30 pm #

        Honestly no I don’t I still believe changing it to one hour more is not going to makinthe huge revenue increase tht Malloy thinks. He said some outrageous number that we would make from Sunday sales we never hit that Mark(I really wish I could remember what it was though).And I will not stay open till ten I just can’t do it, I’ve been in this type of business since I was 13 learning from my father who has owned the store for 20+ years. later on at the night it gets scary last year we had a total of 4 attempted robberys/break ins all happening around 9 when we close I can’t even imagine how things will be at 10.
        Another thing I would like to add is I’ve been hearing that there is a lobbyist from total wines that’s friends with Malloy and that’s why these things are being pushed but again I’m not how sure this is and still trying to find actual proof.

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  4. Ricky February 14, 2015 at 1:20 am #

    If you go to other states, like say, FL you hardly see any mom & pop liquor stores. That’s because all grocery stores there can sell beer AND wine. Sure you still need to go to places (like Total Wine which exists there too) to get liquor or plenty of other places. But it seems like CT is over saturated with smaller liquor stores. Let grocery stores sell beer and wine, and as much as it sucks for the smaller person…that’s the changing of times. Look at Radio Shack. 30 years ago it was THE place for smaller electronics. By changing the times, the bottle limit, and allowing stores to carry wine and maybe even liquor you can expand the reach to consumers and people can finally get that TJs wine they’re craving for.

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    • Dan and Kristien Del Ferraro February 14, 2015 at 5:33 pm #

      Good points, Ricky. We think, and hope, that there is some kind of happy medium where big and small businesses can thrive. Right now it seems good in the state, but who knows? Perhaps more changes can bring more balance to business and help the consumer?

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  5. Jeffrey S. February 13, 2015 at 8:44 pm #

    Dan & Kristien great writing but this will hurt the small liquor store owner. While it helps the consumer its the Wal Mart Syndrome as its great for the Total Wine (5 more stores in CT), Stew Leonard’s. even BevMax but labor costs skyrocket for small stores who will be forced to shave margins to compete so yes its going to force more stores out of the state. I’m curiously optimistic as to the impact of the removal of the minimum bottle law on craft breweries in CT. My hope is that it leads to an influx of cider mills and distilleries and even a few more nano brewers.

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    • Dan and Kristien Del Ferraro February 14, 2015 at 5:30 pm #

      Great thoughts. This definitely makes us nervous, especially for small business owners. Certainly under this plan, small owners will rise to the top and become mini chains. But, there will be plenty of little places that feel the squeeze. Lots of states have been through this, so we wonder what it’s been like for them? Did big business take over?

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  6. Dan and Kristien Del Ferraro February 13, 2015 at 5:46 pm #

    Yeah. That’s true, not much craft at some of the places like CostCo, but definitely at Total Wine. They have almost anything you could imagine.

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  7. Jason February 13, 2015 at 11:42 am #

    The big box stores get kick backs on the national scale from suppliers (I’m in the business I know) so they definitely don’t lose money. How many “local” craft beers do you think Costco carry, or Wal Mart? That’s what yoi worry about.

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