OK, now that the post-mortems all have been written for the whirlwind 2012 legislative session, most observers have picked their winners and losers, along with their greatest disappointments.
What was my biggest bummer? The watered-down education bill? No jobs bill? The delay in instituting generally accepted accounting principles? No way. As a wine drinker, my biggest disappointment is the outcome of Gov. Dannel P. Malloy’s liquor sales reform proposals. Sure, we got Sunday and holiday sales, but little else.
If you think the teachers unions were the most successful interest group to stymie reform efforts during this legislative session, think again. If you want to see real power, look at the way the package store owners were able to block any meaningful repair to the antiquated and punitive system of liquor sales in this state.
No, it wasn’t a crucial piece of legislation. No child will be stuck in a bad school as a result of the tepid bill. No construction worker will remain idle because we can’t buy wine by-the-case at a discount. But consumers will continue to get soaked by a system that treats package store owners as a protected business class. And the state of Connecticut will continue to lose revenue to consumers who drive to Yankee Spirits in Sturbridge or Bevmax in Port Chester. And all this is in the name of sparing one type of business the burden of competing for customers in the same way virtually everyone else does.
Back in February when I met with Malloy in his office at the Capitol with the rest of the CTNewsJunkie editorial board, the governor was emphatic in condemning the archaic system of price controls that guarantees profits for package store owners but forces consumers to drive out of state or pay 30 to 40 percent more for alcohol. He had returned from a recent trip to Sturbridge, where a bottle of cabernet was on sale for $14.98.
“The minimum legal price that you could buy that bottle of wine in Connecticut is $21.99. There is no way that’s not causing us to lose sales. And the idea of having minimum pricing is, quite frankly, outrageous.”
Industry experts have told the governor we are losing $570 million in sales every year to more consumer-friendly states on our borders. That means that not only are we paying too much for the product, but that taxpayers have to make up the difference for the revenue that is lost to those other states. Malloy is right. It’s outrageous.
Unfortunately, negotiations in committee took out the elimination of price controls, which remain largely intact with one minor exception. Malloy had proposed that package store owners be allowed to discount five items per month. The bill that was passed only allows one item per month at 10 percent below the cost of acquisition.
Also left intact was the liquor industry’s cherished quotas that restrict the number of licenses in any town to a ratio based on population. Left virtually untouched was another embarrassing bit of protectionism limiting any single owner to no more than two stores. Malloy had proposed raising it to seven, but negotiations cut it to three.
Also left on the cutting room floor was the governor’s idea of allowing gas-station convenience stores to sell beer, as they’re permitted to do in neighboring states. The reason cited for nixing that proposal: without evidence, Sen. Edith Prague and package store owners themselves suggested the ease of beer purchases at convenience stores might increase drunken driving rates and result in a rise in underage drinking.
For most of the remaining price control and retailing issues on Malloy’s list, a task force was created for further study. In legislative-ese, that usually means it will die.
What is the cause of such inaction, aside from the little package stores’ muscular lobbying outfit? Well, some legislators — Republicans such as state Sens. Len Suzio and Andrew Roraback, no less — will tell you that it’s not fair to change the rules in the middle of the game or that deregulation will destroy Main Street and create the Walmart effect for the liquor industry.
That sounds improbable to me, but even if corner package stores migrate to the malls and shopping centers, as have many barber shops and clothiers, would it be the end of the world? Heck, retailers with more room might even buy in bulk and drive down the cost of a bottle of Jim Beam for the rest of us.
Now bear in mind that the state’s anachronistic liquor laws don’t affect me profoundly. My town borders both New York and Massachusetts, so I can easily cross the line and avoid having to deal with bad policies and high prices. But that doesn’t mean there aren’t important principles at stake.
One package store owner in the Northwest Corner told me he felt disrespected — perhaps in the same manner as Connecticut’s teachers when Malloy told them all they had to do is show up for four years to get tenure. He thought the governor had “attacked the liquor industry.” Wrong. Malloy attacked archaic regulations that are indefensible and serve to jack up the cost of living in this state. It’s almost enough to drive me to drink.
Terry Cowgill blogs at ctdevilsadvocate.com, is the editor of ctessentialpolitics.com and was an award-winning editor and senior writer for The Lakeville Journal Company.
