Local Retailers Brace For Reform Of Liquor Laws

By John Voket

For Cork N Barrel co-owners Chris Van Steen and Wayne Duris, being open on Sunday would be a plus, even if their customer traffic was light. But for Carlos Goncalves of Hawleyville Wine and Liquors, opening Sunday would rob him of the only time he has for church and family activities.

Mike Kerler of Sandy Hook Wine & Liquor sees the acceptance of a seven-day week as an option he might exercise only during his busier warm weather months, while A World of Wine & Spirits owner Jeff Oetjen sees a Sunday liquor law repeal as the start of a trend threatening the existence of mom and pop package stores across Connecticut.

“It’s not about money, it’s about people,” Mr Oetjen said of the damage he believes will be done by the list of proposals tagged onto Governor Dannel Malloy’s still morphing plans to reforming the state’s liquor, wine, and beer retail landscape. “This can’t happen for 1,400 reasons, and I’m one of them.”

He was referring to the approximately 1,400 so-called “mom and pop” Connecticut package stores, which he believes will be negatively affected if Gov Malloy’s latest ideas are implemented. One day earlier, state legislators entertained nearly 10 hours of testimony in a public hearing attended by between 800 and 1,000 individuals with some stake in the matter.

Connecticut is one of two states (Indiana is the other) that still prohibit Sunday retail liquor purchases.

Carroll J. Hughes, a longtime lobbyist for a state package stores association, said while Sunday sales might deal a negative financial blow to small package store owners, his greater concern is for changes to state law that would permit convenience stores at gasoline stations to sell beer; provide supermarkets an option to obtain package store permits; allow liquor sales until 10 pm seven nights a week.

Members of his association instead are reportedly appealing to lawmakers to only permit Sunday sales to between 11 am and 5 pm.

Gov Malloy offered some changes hoping to reach consensus this session with the state’s liquor and alcohol industry on a plan he believes will ultimately boost alcohol sales.

A list of suggested revisions, distributed on Monday to some state lawmakers and first obtained by the Associated Press, revamped the proposed changes to wholesale pricing rules, limits on package store permits, rules for minimum retail prices and quantity discounts from wholesalers.

The governor has said he wants to modernize Connecticut’s liquor laws to promote competition and lower prices for the state’s consumers, many of whom travel across the border to neighboring states to make their alcohol purchases. His plan has received mixed reaction, with the Distilled Spirits Council supporting the legislation and some package store owners claiming it will hurt their small, local businesses.

Gov Malloy continues to support retail alcohol sales on Sundays, extend hours of operation and allowing some convenience stores that sell large quantities of groceries to also sell beer. He said his bill would help recapture the approximately $570 million in sales that Connecticut loses each year to cross-border sales.

Malloy Concessions

Part of the governor’s plan would call for a new statewide licensing system that uses medallions to set a maximum number of permits for package stores. He originally wanted to limit the number of stores that owners could operate to nine, up from the two currently permitted.

But he is now proposing to change the cap to six stores, with a gradual phasing in of one new store per year for owners beginning in October. That concession appeals to Mr Kerler, who said he has always been in favor of allowing Sunday sales.

The governor is no longer proposing to eliminate the limit of one package store per 2,500 residents in a municipality. And he has also made some changes to his proposed overhaul of alcohol pricing.

For example, he had wanted to get rid of a process where distributors post their prices every 30 days. Those prices can later be amended, giving time for different distributors to align their prices.

Under the latest revisions to the bill, that process of the amending the price is eliminated.

The governor had also wanted to remove the rules that set minimum retail prices for alcohol. Under his revised plan, retailers would be able to sell a bottle of alcohol at the actual cost of the item, but not below cost.

They would also be allowed to choose up to five items per month, per store, that may be sold up to 10 percent below cost.

Currently, a 1.75 liter bottle of Absolut vodka is being advertised in Massachusetts for $25.99, while the minimum allowable price by law for that same bottle in Connecticut is $31.99. Those figures do not include taxes.

Mr Goncalves in Hawleyville said if the Sunday option was passed, he would consult with other competing package stores in the area. If they were all going to open for a seventh day, then so would he.

But if his immediate competitors all shared his desire to reserve one day a week to stay closed, “I would consider staying closed, too. Everybody needs one day of rest.”

“We spend enough time here,” he added. “Sunday is normally my day for family and church. And I don’t see it contributing to more sales — I think we’d see the same profit, just spread out over seven days instead of six.”

Sunday Sales ‘No-Brainer’

Mr Kerler said he was pleased to hear through his retail association and from industry reps and delivery drivers that the governor was willing to capitulate on several proposals that would have threatened many liquor retailers in his position.

“Sunday sales was a no-brainer. It looks like that will go through,” Mr Kerler said. “I like the fact that [the bill] will no longer allow for portable permits, and that the governor is willing to keep permits down to one for every 2,500 residents in any community.”

Mr Oetjen, who said he generated 120 petition signatures in two days against the sweeping changes, said despite Gov Malloy’s seemingly aggressive pro jobs and pro business agenda, he does not see much of the proposal as positive.

“This is not business-friendly — how does this grow jobs?” he questioned. Mr Oetjen said in particular, if big box stores were permitted to sell liquor, the change would “render my business valueless.”

“I couldn’t compete,” he added. “If Malloy wants to be the governor who [delivers] Sunday sales, that’s fine. Just take the rest of those ideas out.”

Down at Cork N Barrel, Mr Van Steen welcomes the idea of opening seven days a week.

“Even if we only got a few customers, there’s still plenty for us to do here if we could open Sunday,” he said. “My partner Wayne and I got into the service industry because we wanted to be there when customers need us. And whether the lights are on or off on Sunday, we still have to pay the rent, right?”

Mr Van Steen said today, one of his biggest gripes is about being required to buy large quantities of product that he literally warehouses in his store, just to be sure he can keep his wares at price points that turn a profit.

Pointing to stacks of cases of Sobieski vodka, Mr Van Steen said in order for him to get the best price from his wholesaler, he had to purchase between a 60- and 90-day supply of the liquor.

“It’s not fair because we’re paying rent for retail space we’re using for warehousing, and our distributors are paying rent for industrial storage at a much lower rate,” he said. “This practice is turning liquor stores into warehouses.”

(Associated Press content was used in this report.)