Not toasting governor’s liquor idea
Gov. Dannel P. Malloy is proud of his idea to get rid of state minimum liquor pricing in Connecticut, but alcohol retailers in Wilton are not exactly toasting to his success in the legislature.
“If the governor just gets rid of minimum pricing, he’s not helping anyone but Total Wine,” said Mishal Kamver, owner of the Wilton Wine Shoppe, one of two liquor retailers in this formerly longtime dry town. He was referring to Total Wine, the big-box liquor retailer that operates in the region.
“He’s not helping the consumer,” Kamver said.
Kamver said the entire system for how liquor is marketed in Connecticut needs to be revised, to be fair to all the retailers, large and small.
The small, independent retailers like himself, for example, must buy their product seasonally, and at lock-in prices to get the best deal. Their profit margin is determined not only by how much they can charge for the product but also by how much they must pay for it wholesale. That is the advantage that big-box chain liquor stores have. They can buy in quantity, and bypass the seasonal lock-in sales format.
The customers think minimum pricing is bad because they imagine they can buy their liquor cheaper by crossing the border into New York, but that is not always the case, Kamver said. He has seen prices in New York and knows some liquors actually sell for less here, despite the minimum pricing.
For example, he sells a 1.75-liter bottle of Tito’s Vodka for about $30, while the same product sells in New York for $40. “All day long,” he said.
Mitch Ancona, owner of the other liquor store in town, Ancona’s Wines and Liquors, could not be reached for comment.
The issue is timely because Malloy in late February submitted a legislative proposal to the Connecticut General Assembly that would update the antiquated state law that currently forces the owners of certain retail stores to sell their products at artificial prices set by liquor wholesalers, resulting in unnecessarily high prices for consumers.
Connecticut is the only state in the country that has a law mandating that retailers of alcoholic beverages sell their products no lower than a minimum price above wholesale cost determined by the wholesale industry. This means that — unlike everywhere else in the nation — these retailers cannot set the prices of the products they put on the shelves in their own stores. As a result of this law, which the state adopted in 1981, the artificially determined prices typically end up being higher than the prices these products sell for in nearly every other state in the country, forcing Connecticut residents to either pay more money or travel to a bordering state where the identical products are likely sold at a lower price.
“If we had a law that forced stores to sell bread for a price that was determined by state government, people would be screaming about capitalism and big government. But for some reason, we allow this anti-free market mandate to continue for this one particular industry — and we are, in fact, the only state in the nation that operates in this manner,” Malloy said in a statement. “Because of this law, business owners have fewer rights in determining the operations of their businesses, and consumers are forced to pay artificially inflated, high prices for products that are sold at a substantially lower price nearly everywhere else. Let the businesses determine the prices for these products, not the government.”
Under the legislation Malloy introduced, the existing law would be modified to allow small business owners to sell wine and liquor using a more reasonable, logical criterion: actual cost paid. “This is the standard used in each of Connecticut’s neighboring states and nearly everywhere else throughout the country, where many small package stores continue to thrive,” a press release from the governor’s office said.
The governor’s legislation, An Act Concerning the Regional Competitiveness of Connecticut’s Alcoholic Liquor Prices, has been referred to the legislature’s General Law Committee, where it is currently awaiting consideration by lawmakers.