Sunday liquor sales debate evolves into competing visions of prosperity and despair

Correction: An earlier version of this story stated that two states, including Connecticut, ban Sunday liquor sales.  In fact, 13 states, including Connecticut, have such a ban  — Editor

The battle to legalize Sunday liquor sales completed its evolution Tuesday into conflicting visions of prosperity and despair.

On one side, liquor wholesalers, major retailers, new groups looking to sell beer, wine and spirits, and Gov. Dannel P. Malloy’s administration told a legislative panel that proposed changes would bolster the economy and drive down some of the highest liquor costs in the country.

On the other side, the long-standing chief lobbyist for Connecticut’s package stores predicted that changes offered by the Malloy administration — not the institution of Sunday sales but rather measures expanding competition — would eventually eliminate more than 8,000 small business jobs.

While calling alcohol a “unique product” subject to “complex and long-standing” regulatory laws, Malloy wrote in testimony to the General Law Committee that the status quo no longer reflects “modern-day realities.”

“Not only do Connecticut businesses lose hundreds of millions of dollars every year to our neighboring states, but the consumers who do shop here are paying exorbitantly higher prices,” Malloy wrote in testimony read aloud by Department of Consumer Protection Commissioner William Rubenstein.

End CT Blue Laws, a coalition that includes the Connecticut Beer Wholesalers Association, the AFL-CIO, other major labor and liquor wholesalers, and grocery and convenience store owners, estimates the state’s liquor industry is worth $8.5 million annually. But it stands to gain another $570 million per year by recapturing Connecticut consumers who cross the borders to buy their liquor.

“How long are we going to allow parking lots in Massachusetts, New York and Rhode Island to fill up with Connecticut license plates every weekend?” Malloy said. “How long are we going to watch our residents cross the borders to buy in other states the exact same products they could be buying here, from local Connecticut retailers? And how long are we going to continue to cheat the consumers who do shop here with exorbitant prices and inconvenient hours?”

The governor’s bill would allow major supermarkets — which have the advantage of receiving big wholesale discounts — to sell liquor under minimum prices fixed under current law under limited circumstances. This advantage will drive down prices across the market and wreak havoc with small package stores that don’t receive similar discounts, said Carroll Hughes, lobbyist for the Connecticut Package Store Association.

“That starts what I’m going to call the calamity of confusion,” said Hughes, who represents about 900 package stores with about 10,000 employees. “Discounts will drive the price. … They basically want us to sell totally below costs at all times.”

And if discounts weaken the package stores, so will other provisions that would allow up to 2,000 new permittees to sell liquor at the retail level, including convenience stores and gasoline stations

Hughes predicted that package stores would lose about 80 percent of their employees, or about 8,000 workers, under this new system.

Though Hughes’ group has long opposed Sunday sales, the lobbyist said that no longer is the case. The association supports Sunday hours generally in the range of 11 a.m. to 5 p.m., or from noon to 6 p.m., he said.

The key to protecting small package stores, he said, is not really banning Sunday sales, but rather ensuring that other retailers, particularly major chains that can take advantage of huge discount options, don’t dominate. “Shame on us,” Hughes added. “We didn’t think about it beforehand.”

But Jay Hibbard, a representative of a major liquor suppliers’ coalition, the Distilled Spirits Council of the United States, said the real winners of the proposed changes would be consumers. “Connecticut’s retailers will be free to offer better prices … and recapture business that is going out of state.”

According to the End CT Blue Laws coalition, a bottle of Beringer’s white zinfandel retails, on average, for $10.99 in Connecticut, and $7.98 in Massachusetts. Those prices also are affected, though, by liquor taxes, which also are higher in Connecticut.

“It’s about the choice for the consumer,” said Kevin Curry, manager of the Meriden-based convenience stores, Danby’s Service Stations. “What is easier for the taxpayers of Connecticut” than more competition to keep prices down?

But Charles Bowe, whose family owns two package stores in Groton, said that if state officials truly want to maximize competition in the liquor market, they also should eliminate the regional exclusivity rules that beer wholesalers enjoy. Similar franchise laws protect wine and spirits distributors.

Why shouldn’t package stores be able to shop among several beer distributors to find the best wholesale price? asked Bowe, who also gave lawmakers a petition signed by 7,000 of his customers opposed to the governor’s bill.

“If we don’t have the ability to shop for the best price, it will be difficult to be competitive in the arena you are looking to change,” he said.

Rubenstein also testified that the governor’s bill still allows package stores to maintain considerable economic and legal advantages that other stores don’t enjoy.

The governor’s plan creates what has been called a “medallion system” that allows permitted stores to sell their liquor permits.

“We don’t want to upset the entire apple cart,” Rubenstein said. “If you’re going to change something, it always creates a degree of anxiety, and the anxiety in this room clearly is palpable.”

Though the governor’s plan would increase significantly the number of retail outlets selling liquor, Rubenstein said regulation would not be a problem. “I want to assure the committee that we are getting increasingly good at what we do to ensure compliance,” he said.

But Hughes argued the new workload would swamp the department and diminish oversight dramatically.

Several legislators testified against the bill, focusing largely on potential job losses at small package stores — and the provision allowing liquor sales at convenience stores.

“There is a section of this bill that I find appalling,” Sen. Edith G. Prague, D-Columbia, one of the legislature’s most outspoken advocates for tougher drunken driving penalties, said of the languages referring to convenience stores.

Prague said she fears mixing alcohol sales with stores that specialize in gasoline sales and quick, impulse transactions, is dangerous, particularly for some patrons. “It could be very tempting for them to open up a can or a bottle,” she said. “For years and years, this legislature has been fighting drunk driving. Our attempt to discourage people from drinking and driving is something that we hope will continue.”

The convenience store provision “doesn’t make sense,” said Sen. Stephen T. Cassano, D-Manchester, who raised a similar objection. “Public safety has to be part of the consideration.”

Both Cassano and Prague also questioned whether state government has properly studied the potentially negative economic impacts.

For example, Cassano said, should there be controls placed on the medallion system to restrict the sale of liquor permits to companies with headquarters outside of Connecticut? “Let’s not try to get a solution now and then come back two years later and say ‘What about this? What about that?'”

Before Tuesday’s hearing, hundreds of store owners, labor leaders and consumers swarmed the north steps of the Capitol to rally for repeal of the Sunday ban that is likely to topple this year with Malloy’s support.

A crowd estimated at 600 by Capitol police chanted “let us compete” and “kick the blues” as speakers argued that repealing the so-called Blue Laws, as well as Connecticut’s arcane minimum pricing rules, would help consumers and bolster Connecticut’s economy.

Hundreds rally outside the Capitol.

“This bill makes common sense,” said Donnie Alaimo, owner of the Freshwater Package Store in Enfield, projecting that liquor retailers would receive a 4 percent to 8 percent boost in business, particularly in communities like his on the border with Massachusetts, where liquor is sold on Sundays.

Mark Espinosa, president of Farmington-based Local 919 of the United Food and Commercial Workers’ Union, said the bill should mean new jobs and increased hours for employees of Connecticut’s grocery stores.

“We need to get those part-timers some extra hours,” said Espinosa, whose local represents about 9,400 employees at the Stop & Shop chain. “It’s good for everybody.”

Other package store owners have opposed Sunday sales for years, even as Massachusetts, Rhode Island and New York allowed its liquor outlets to open for business. But with Malloy’s backing, the industry appears resigned to Sunday sales.

Despite strong winds and temperatures in the high 30s, rally attendees packed the Capitol steps, carrying signs that read: “Yes !!! We’re Open Sundays” and “CT: Welcome to the 21st Century.”

Connecticut is one of 13 states that bans Sunday liquor sales, and Stan Sorkin, president of the Connecticut Food Association, predicted that consumers would welcome a Blue Laws repeal.

“It’s time to believe poll after poll” that show about two-thirds of voters support repeal, he said, adding that the current system also has skewed prices in Connecticut as retailers try to compensate for one day of lost business.

“It’s time to bring Connecticut in line with every other state in New England,” Sorkin said.