Malloy to push to ease restrictions on alcohol sales and pricing
With an announcement timed to make the Sunday newspapers, Gov. Dannel P. Malloy intends to propose a series of changes Saturday in the state’s restrictive alcohol laws, including a repeal of minimum pricing and the ban on Sunday sales.
Administration officials say Malloy will explain his proposal in Enfield, one of the border towns where package-store owners have broken with the rest of what is a mom-and-pop industry and asked to compete with longer hours of operation and flexible pricing.
Aside from the convenience of being able to shop on Sunday or as late as 10 p.m., consumers could see lower prices for alcohol, one of the products for which Connecticut long has had a “minimum markup.”
The Malloy administration hopes to realize greater tax revenues from the longer hours and Sunday sales, but the main goal is a more competitive regulatory structure that yields lower prices for consumers and discourages state residents from crossing into New York, Massachusetts and Rhode Island for alcohol.
The administration has been working with industry representatives, discussing a broad range of possible changes in one of the state’s most tightly regulated consumer product markets.
Last year, Malloy did not object to Sunday liquor sales or longer package-store hours, but he did not push for it. News that he would place his office behind the changes quickly was branded a political game-changer.
“It’s an issue here every year,” House Speaker Christopher G. Donovan, D-Meriden, said today. “Certainly, the backing of the governor changes things.”
“That might be the tipping point, absolutely,” said House Minority Leader Lawrence F. Cafero Jr., R-Norwalk. “The governor’s office, regardless of who holds it, has enormous powers and can be very influential in the passage of legislation.”
But Sen. Paul Doyle, D-Wethersfield, co-chairman of the legislature’s General Law Committee, said he’s uncertain how effective even the governor can be in developing a compromise.
“There really was very little support in the legislature last year” for Sunday sales, said Doyle, who said he remains undecided and open-minded. “Every legislator’s got his local people screaming at him” from all sides of the argument.
“I think (Malloy’s involvement) helps, but will it make a difference?” Doyle added. “I don’t know.”
Malloy’s backing of a first-in-the-nation law requiring some private employers to offer paid sick days was instrumental in passage of a measure that had successfully been held at bay for years by business lobbyists.
An industry lobbyist seemed resigned today to some changes in the law.
Carroll Hughes, executive director of the Connecticut Package Store Association, said he thinks there is the potential for a “reasonable” compromise between the 800-plus stores he represents and the Malloy administration, but that does not involve allowing liquor sales on all Sundays throughout the year.
“Fifty-two is too much,” Hughes said Friday. The key to finding industry support for adding additional sales hours, including opening on some Sundays, hinges on whether stores can expect to make enough profit to cover their expenses. “We have an aversion to opening up on days when you are not going to do any business.”
Hughes said liquor sales on Sundays during warmer weather periods, and during those close to certain major holidays, might pass that test.
He said that state officials also could help those package stores that find it expensive to open for longer hours by easing current restrictions against quantity discounts on wholesale liquor purchases.
Hughes said Malloy first approached him last fall about finding a compromise that would allow for expanded operating hours for liquor sales. “The governor said that everything would be on the table,” Hughes said, adding that the debate is complex, and all sides will need to be involved for any compromise to happen.
For example, substance abuse prevention groups and others hoping to moderate liquor use, and block consumption by minors, traditionally have opposed Sunday sales.
“By staying open you’re just providing another day when children potentially have the opportunity to drink,” said Craig Turner, Wallingford’s youth services director and a member of both the Connecticut Coalition to Stop Underage Drinking and the Governor’s Prevention Partnership.
Turner argued that adults generally don’t increase consumption when liquor store hours of operation are increased.
But the legislature’s nonpartisan Office of Fiscal Analysis projected last January that Sunday sales would boost consumption by 2.8 percent, citing similar experiences in Massachusetts, Delaware and Oregon. Legislative analysts estimated that would raise an extra $2.4 million per year in sales taxes and $1.2 million from the liquor excise tax.
But both of those levies were increased by Malloy and the General Assembly in May. The sales tax rose from 6 percent to 6.35 percent and the liquor levy was increased by one-fifth. OFA hasn’t offered a new projection on Sunday sales since those tax increases were ordered.
Still, Turner said that while package stores generally have a good track record when it comes to refusing liquor sales to minors, bars and grocery stores haven’t been as effective at enforcing the law.
“How do you balance generating more revenue by selling a product that is — certainly for kids — a harmful product?” he said. “Where do you draw the line? If your goal with Sunday sales is to raise more revenue, then increasing taxes, to be fair, has to be part of that discussion.”
Over the past 40 years, package-store owners have been remarkably adept at defeating efforts to loosen the state’s alcohol laws, even as Connecticut and other states lifted restrictions on days and hours of operation for other retailers.
The state made a modest change in recent years, expanding from 8 to 9 p.m. the hours by which retail beer, wine and alcohol sales must stop. On Saturday, Malloy intends to propose a 10 p.m. closing hour.
Connecticut has anti-competitive minimum markup laws for alcohol, milk and cigarettes, laws passed decades ago with a rationale of protecting small merchants against predatory pricing by larger competitors.
In a 2009 analysis by the Office of Legislative Research, an official in the state Department of Consumer Protection declined to speculate on exactly how prices might be affected by repeal, but suggested that some retailers might offer low prices on some alcohol products as loss leaders.
Current law prohibits retailers from selling alcohol below cost posted by wholesalers, plus shipping costs. For alcohol products other than beer, there also is a fee ranging from two to eight cents per bottle.
Malloy’s intention to push for Sunday sales was first reported today by CTNewsJunkie, with the administration withholding other details that will be released Saturday.
A year ago, the media-savvy administration carefully released elements of its tax-and-spending plan in advance of its full release, a practice it apparently intends to repeat this year in advance of the Feb. 8 opening of the General Assembly.
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