Could this be the year Lucy’s conscience catches up with her and she actually holds the football long enough for Charlie Brown to boot it toward the goalpost? Since the early days of the Malloy administration, it seems like every year, either the governor or lawmakers offer a bill that would reform part of Connecticut’s archaic liquor industry. And almost every year, little to nothing comes of it.
For the uninitiated, package stores are a uniquely protected class of business owners in our state. With its minimum pricing and ownership rules designed to limit competition, Connecticut has the most oppressive and anti-competitive laws governing the sale and distribution of alcohol in the country. It punishes the consumer in the name of protecting an entire class of retailers — mostly mom-and-pop package store owners — from meaningful competition.
Whenever proposals are made to reform the regressive system, the Connecticut Package Stores Association, a lobbying group representing liquor stores in the state, cries foul. Their argument is usually something along the lines of: “Any change in the system will cause hundreds of our client stores to go out of business.”
Yet somehow, the 1,250 package store owners belonging to the CPSA have survived and continued to thrive even after Sunday sales were finally permitted against their wishes nine years ago. Even though Sunday openings were not mandatory, the CPSA argued that if some opened on the Sabbath, then others would feel compelled to follow suit. In other words, package stores would have to compete against one another like other businesses do. Oh, the horror!
Now it should come as no surprise that the CPSA is in a similar lather over another proposal in the General Assembly that would allow grocery stores to sell wine. A similar bill was introduced last year but did not have the backing of the Connecticut Food Association (CFA), which represents independent and chain food stores throughout the state.
Now the CFA is on board and is launching a full-court press to get the bill passed. The association has started a slick marketing campaign with videos and launched a new target-specific website, ctwinenow.com, whose purpose is to convince lawmakers and the public “to remove existing barriers to the sale of wine in grocery stores,” bringing Connecticut in line with the 42 other states (and the District of Columbia) that allow the practice.
CFA cites a 2012 study that found 84% of Connecticut residents approve of the sale of wine in grocery stores, up from 72% five years ago. Citing a study by the Stonebridge Research Group, CFA says the bill would create more than 1,000 jobs and hundreds of millions of dollars in economic impact, not only through more sales in grocery stores but by stimulating demand that will “ultimately lead to an increase in the volume of grapes and fruits grown in Connecticut, allowing for the growth of wine production by Connecticut wineries and vineyards.”
The Food Industry Association underwrote an economic-impact study by the California-based Stonebridge Research Group on allowing wine to be sold in food retail stores. Wayne Pesce, president of the Connecticut Food Association, examined the study in an op-ed on these pages last year.
Package store owners and their supporters argue that if the bill passes, not only will their sales be adversely affected and hundreds of stores put out of business, but that it will lead to the centralization of liquor sales and actually decrease competition by putting alcohol increasingly in the hands of the big corporations that own most grocery stores. Therefore CPSA’s members need to be protected from predatory corporations.
This is, of course, nonsense. If minimum pricing is eliminated or if the sale of alcohol for off-premises consumption is expanded beyond traditional package stores, then those package stores, most of which are small operations, need to find a way to innovate just like the rest of us who compete for a living against larger rivals.
In return, lawmakers should expand the list of food traditional package stores are currently allowed to sell. And of course, traditional package stores will still be the only outlets permitted to sell hard liquor, so they will continue to have that market to themselves.
As for the possible loss of wine sales to supermarkets, package stores should focus on providing a level of customer service and wine expertise that the grocery stores cannot match. It’s likely the grocery-store chains will emphasize national brands and mass-produced varieties, just as they do with foods. Local package stores could offer expert advice and differentiate themselves by prominently featuring the products of Connecticut wineries and holding regular tastings with local vintners on-hand.
The Connecticut Package Stores Association likes to brag about its role in “protecting the rights of package store owners in Connecticut.” But it has no right to protect its members from meaningful competition and shortchange consumers by depriving them of choice.