On the eve of a public hearing over the governor’s proposed reform of the state’s liquor laws, the Malloy administration recommended some changes aimed at addressing package store owners’ concerns.
While the revisions do not impact Gov. Dannel P. Malloy’s plan to legalize the sale of alcohol on Sundays, they do make compromises on other provisions, which some owners found to be more troublesome.
Last week, Bill Fore, president of County Wine and Spirits in New Preston, said Malloy’s original plan to eliminate the state’s minimum pricing requirements and allow bulk discounts would drive mom-and-pop stores out of business.
That’s because a large store getting a bulk discount could make a healthy profit selling products at a price below what Fore said his shop would be paying wholesale.
Under the proposed changes, retailers would not be able to sell a product for less than they paid for it. In a phone interview Monday, Fore called the change a “commendable compromise.”
“It’s sort of a half measure because what it does is still allow a large store to buy at a lower price and have a lower cost of acquisition,” he said. “We would still like to see a minimum price so we can all compete on a level playing field.”
Malloy’s original bill also had proposed raising the number of stores an owner could operate from two to nine. The revised bill caps the increase at six, allowing owners to purchase one new store per year beginning in October.
Fore also had expressed concerns over the proposed package store licensing, or “medallion,” system. Malloy’s original bill would have eliminated current language which only allows one liquor store per 2,500 people in a town. That caps the number of stores in a town, which in turn makes a store owner’s business more valuable, he said.
The governor had planned to issue to package store owners a medallion for each store. The medallions could then be bought and sold on an open market. A medallion could be used to open a store in any town. Fore said that would have devalued store owner’s assets by allowing more stores per town.
Under the recommended changes, the medallion system would still be in place. However, the bill would preserve the one-store-per-2,500-residents cap. Fore called the change “terrific.”
“I’m very pleased because it does help protect the assets of businesses and that’s a very good thing,” he said.
Malloy’s original plan also proposed to eliminate the posting of prices at the wholesale level. Without posted prices there is very little way to make sure everyone is playing fairly, Fore said.
“These are very positive changes and I have to say I’m very pleased to see this is going on,” Fore said.
The changes reinstate wholesaler price posting but remove a process by which the prices can be amended after they are posted.
Fore said other changes make sense but may be tough to enforce, like a provision that allows retailers to pick up to five items and sell them at 10 percent below their acquisition cost.
“It provides a way to do clearance sales for things they need to get rid of,” he said. “But it may open the door for abuse because there’s no way to monitor it very well.”
A public hearing on the bill is scheduled for 11 a.m. Tuesday before the General Law Committee at the Legislative Office Building. Carroll Hughes, the head of the Connecticut Package Store Association, who was unable to be reached for comment Monday, said last week that he expected as many as 1,500 package store owners to come to the hearing.
A rally in support of the bill also is scheduled for 10 a.m. on the steps of the state Capitol building.