HARTFORD, CT — Members of the Connecticut beer, wine and distilled spirits industry packed a public hearing room Thursday to offer their opinion on a number of bills seeking to modernize Connecticut’s liquor laws.
Seven years ago Connecticut got rid of its “Blue Laws” and allowed Sunday alcohol sales, then it followed up by modifying the minimum pricing laws to allow for one item to be priced below a wholesaler-established and posted “bottle price.”
The pricing structure of Connecticut’s liquor laws, according to those who support them, protects the 1,256 smaller package stores because it doesn’t allow larger package stores to increase its customer base by lowering its prices.
Rep. Michael D’Agostino, D-Hamden, who co-chairs the General Law Committee, said “a lot of our liquor laws are 20, 40, 80 years old,” and some of them have not been looked at in decades. He said that needs to change.
Many of parts of the industry, like the craft beer segment didn’t exist even a decade ago and Connecticut’s laws, according to D’Agostino, need to be modified and updated to reflect their needs “with the needs of the existing market participants.”
Earlier this month an appeals court ruled that the minimum-bottle pricing and other restrictions by Connecticut on liquor sales compel “only vertical pricing arrangements among private actors.”
This means they are not pre-empted by federal law.
D’Agostino believes the laws should be updated and modernized.
He said he’s pondered Connecticut’s three-tiered system of alcohol distribution system and concluded that wholesale distributors have a “monopoly.” He also threatened to subpoena the wholesalers if they didn’t provide him with information about their territories and products.
Senate Republican Leader Len Fasano, R-North Haven, said it was unacceptable for the chairman of a committee to threaten members of the public in that manner.
Legislation that would have required craft breweries to decide between selling their products off-site or operating their taprooms was swiftly killed earlier this year after an uproar from the craft brewing industry. The industry blamed the wholesalers for encouraging two Hartford lawmakers to introduce the legislation.
The wholesalers say they want to work with the new emerging craft industry to distribute their products.
“No one is too small to be with a distributor,” Jude Malone, executive director of the Connecticut Beer Wholesalers Association, said.
Malone said the craft brewers get to control all four segments of the industry. They make the product, they distribute the product, they sell the product, and they get to have a taproom.
Asked if wholesale distributors wanted to open taprooms, Malone said “it’s not that. As we change things the fabric of our industry changes. So how do we grow and make sure we’re all growing together.”
The craft breweries want to be allowed to sell more of their product and some of the legislation debated by the General Law Committee Thursday would allow them to sell an unlimited amount to customers.
John Kraszewski of Armada Brewing said there are now 80 brewers in the state and they opened their brewery to focus on their products.
But in order to grow they are happy to work with wholesalers to distribute their products.
Phil Pappas, executive director of the CT Brewers Guild, said they don’t have any information about how many of their breweries use wholesalers to distribute their products.
However, being allowed to open taprooms allows brewers to build their brands and popularity to the point where they need a distributor to get their product to the market. He said he’s still perplexed as to how being able to sell more product would impact the wholesale distributors.
They are also looking to be able to sell more than 9 liters on site at the breweries. Pappas said neighboring states don’t have any limits on direct-to-consumer sales.
Pappas said there are now 85 taprooms in the state and the breweries employ 5,000 people and produce 166,000 barrels of beer.
He said in the first five month of their CT Beer Trail Passport program where enthusiasts can collect stamps by visiting their local brewery they generated $330,000 in five months and 9 percent of that was generated from out-of-state visitors.
Pappas said they support the ideas proposed in HB 7148 which would allow Connecticut breweries, wineries, cideries, and distilleries to sell each others products.
There are 40 wineries in Connecticut and most of the sales of their wine happen in the tasting rooms.
Jonathan Edwards of Edwards Winery said he would like to sell craft beers to their male clientele who are not always as enthusiastic about wine as their female companions.
“The craft beer industry is booming,” Edwards said.