Gov. Dannel P. Malloy today strongly defended his revised liquor reforms as a big step toward increasing competition in an industry now sheltered by state law to a degree that is “quite un-American.”
As hundreds gathered in the adjacent Legislative Office Building for a public hearing on the proposal, Malloy told reporters that the state’s strict controls on price and competition are anti-consumer and drive business across the borders.
“For Connecticut’s citizens to be as badly punished as they have been as a result of this minimum pricing structure is ghastly, unfair and has driven business from our state, causing us to lose jobs.”
Since the day he announced his proposal a month ago, Malloy said its focus was price and competition, not another aspect that immediately drew public attention: the end of a ban on Sunday liquor sales.
“I want to be very clear,” he said today. “We need to put pressure on prices in Connecticut.”
Malloy said some wine and liquor sold in Connecticut can be purchased for nearly one-third less in Massachusetts, which he attributed to minimum-pricing rules.
“This has been a 100 percent protected and regulated industry and in so many ways, quite un-American,” Malloy said. “I mean, I go into a pharmacy and there is no minimum price on aspirin. There is not a minimum price for Nyquil.”
On Monday, the administration distributed details of revisions to his plan reached in negotiations with wholesalers, though not retailers. He said today that the revisions meet retailers’ concerns.
The changes would limit competition among retailers and retain some controls on pricing, while still giving retailers more flexibility to sell beer, wine and spirits more cheaply.
The changes reflect a governor more willing to compromise in his second year, especially when the price of sticking to his original plan might be a protracted fight that could draw political resources away from education reform.
His original plan would have introduced chain ownership, raising from two to nine the number of retail permits held by one entity. He had also proposed eliminating a limit of one package store per 2,500 residents of any municipality.
He now is proposing ownership of up to six stores, while keeping the limit of one store per 2,500 residents, which would limit competition among package stores. Malloy called that a concession to package stores.
“Tell me in what other industry that the largest competitor is limited to only being three times as large as the smaller competitor?” he said.
On price, retailers under his new proposal could not drop their prices below the actual cost of acquisition, with the exception of five monthly specials that could be sold at 10 percent below cost.
“We’re capping loss leaders,” he said.
Instead of removing all restrictions on wholesalers offering quantity discounts — a change that favored large retailers — the administration now proposes to work with industry representatives and legislators on a new policy.