Package store owners and lobbyists descended on the Legislative Office Building Tuesday to rail against a plan to lower alcohol prices, claiming it could shut down stores and cost 2,000 jobs. The state, on the other hand, says it would increase sales tax revenues. I need a drink.
The plan, which has been pushed by package store public enemy No. 1 Gov. Dannel P. Malloy, would scrap the existing law that forbids the price of a bottle of alcohol to be set below the wholesale value. This, among other reasons, is why Connecticut’s network of small package stores can compete against liquor giants both in and out of state. It’s also apparently why some people buy their liquor out of state.
The governor now wants to lower that minimum pricing to keep those customers here and boost sales tax receipts. Predictably, package store owners, distributors, distillers, and their friends are all in an uproar over it.
“The sky is falling on this one,” warned Carroll Hughes, a lobbyist for the Connecticut Package Store Association. Former House Minority Leader Larry Cafero, who now works for the Wine and Spirit Wholesalers of Connecticut, said that our system works, and that clearly we’re still drinking plenty. Connecticut ranks 10th among the states for consumption of wine and spirits, according to Cafero.
All of this leaves legislators scratching their heads. When Sunday sales were opened up a few years ago, everyone thought sales tax receipts would go up. I haven’t seen any hard evidence that this plan worked. Now, though, the governor has a new plan to increase sales taxes, and we only have his budget office’s word to go by.
I don’t buy it. I’ve almost never heard anyone complain about the cost of alcohol here, though I’m sure people do. But, like my colleague Terry Cowgill, I go to Massachusetts on those rare occasions when I need to buy alcohol — not because of price, but because they have big superstores like Table & Vine that have better selection. Even if prices here go down, I’ll still go there. I suspect I’m not alone.
The other reason to keep minimum pricing is about jobs, and about protecting our system of small stores. It’s hard to argue that lowering minimum prices would put a lot of strain on the industry, and probably cost at least some jobs — though probably not the 2,000 Carroll Hughes warned us about.
So if most consumers aren’t really bothered by this, there’s not much evidence it would boost sales tax revenue, and package stores are more threatened by lowering minimum pricing than they are by people going to other states, why are we doing this?
Believe me, I don’t feel great about taking the side of the package store, distiller, and distributor lobby. They are huge, have plenty of money and friends who used to be in leadership positions in the legislature, and love to make doom-and-gloom predictions about what might happen if their industry changes in any way. Remember how Sunday sales were going to ruin mom and pop stores? Mom and pop seem to be doing okay, at least as far as I can tell. There haven’t been a run of store closures, at least.
But there comes a point where it feels less like the government is trying to protect consumers than they’re pointlessly poking the package stores with a stick. I have to think that if Connecticut really is losing tons of business to Massachusetts and other states then package stores would have demanded some kind of change. They haven’t.
Yeah, their current arrangement is fairly cozy. They’re basically a protected industry, and if you like the free market and capitalism and all that, you probably think this is an outrage. And yet they keep people employed, including, apparently, a lot of lobbyists who wouldn’t have much to do otherwise. It isn’t always the best system for consumers, certainly, but in times like these where the state is fighting the perception that it is unfriendly to business is there really a point in trying to tear it down?
I get that the state is trying to save money, and I get that they think they’ll get an increase in revenue if they lower minimum bottle prices. But legislators should ask themselves whether a theoretical sales tax receipt increase is really worth all the trouble it might cause.
And if you need me, I’ll be buying booze in Massachusetts.
Susan Bigelow is an award-winning columnist and the founder of CTLocalPolitics. She lives in Enfield with her wife and their cats.
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