Governor’s Dismantling Of ‘Blue Laws’ Begins With Sunday Liquor Sales

By Mark Pazniokas

The Connecticut Mirror©

ENFIELD — Alcohol laws proposed Saturday by Governor Dannel P. Malloy would change the retail market in Connecticut by lifting rules that have long protected package store owners with tight controls on prices, ownership, and hours and days of operation.

More than simply signing onto the annual effort to legalize Sunday liquor sales, Gov Malloy is asking the legislature to overhaul laws that he says inflate prices, stifle competition, and inconvenience consumers.

“What we’re talking about is a comprehensive package,” said Gov Malloy, who is beginning his second year in office. “I don’t like to do things halfway.”

Gov Malloy said his proposals are intended to make Connecticut merchants competitive in price and convenience with liquor stores in New York, Massachusetts, and Rhode Island. Connecticut package stores could stay open daily until 10 pm.

“I talked about benchmarking against other states, understanding what their tax policies were, what their regulatory policies were, and today I take a step forward toward making Connecticut more competitive,” he said.

An industry dominated by small “mom and pops” most likely would see a new era of competition from larger companies running mini-chains of up to nine stores, a challenge likely to force a sale or closure for some of the state’s 1,228 package stores. Current law allows common ownership of just two stores.

Gov Malloy is offering some consolation for package stores: the ability to slightly expand their product lines to include snack foods, and the creation of a statewide medallion system intended to increase the value of present store permits.

By requiring a medallion to open a new store, anyone trying to establish a chain would be forced to buy a medallion from an existing owner. The medallions could be used anywhere within the state, subject to local zoning. They appear to be an enticement for some owners to exit the business.

“What I am saying to the owner of the shops is that I am working with you,” Gov Malloy said. “A lot of these folks are going to retire at some point.”

The medallion system is modeled after a law passed last year in Massachusetts, where a three-store limit was raised to nine without increasing the total number of permits, which is expected to create a market for the medallions.

In a meeting January 14 with Caroll J. Hughes, the lobbyist who represents the package stores, Gov Malloy told him that no new liquor store permits would be issued for at least five years, maintaining the resale value of the medallions, Mr Hughes said.

Another gesture to package stores: they would retain exclusivity on wine and liquor, with grocery stores being allowed to sell only beer.

Mr Hughes conceded that his annual fight against Sunday sales has changed, perhaps decisively, with the governor’s proposal. Gov Malloy on other issues has shown an openness to compromise on details of his proposals, but Mr Hughes acknowledged that simply opposing the entire package is likely to be a losing strategy.

“There is an issue here, a very practical one,” Mr Hughes said. “He sees it as total reform of the industry. Are there details of things he would change? Maybe.”

Gov Malloy was accompanied in his meeting with Mr Hughes by Brian Durand, an aide overseeing the preparing of the new legislation, and by Michael Christ, a former legislator who is one of the governor’s legislative liaisons. Mr Hughes was joined by his son, Josh, also a lobbyist in his firm.

Mr Hughes declined to say if the package store owners will continue to fight Sunday sales, but he said part of his job will be to assess for his clients the new reality of the political landscape. One sign of that new reality is that Mr Hughes appeared more concerned with changes in pricing rules than Sunday sales, a position that would have seemed heretical not so long ago.

“Sunday sales is just one thing. In retrospect, that problem may be the least costly. Sunday sales was the factor that affected the low end, stores that were marginal at best,” he said. “Cost issues, depending on what happens with those, they can affect everybody.”

Connecticut relaxed its minimum-markup law in 1981, but it still has a web of complicated laws and regulations affecting price. Retailers are barred from selling below cost, and they still must mark up prices to cover delivery and other costs.

Mr Hughes had a long, successful run in fighting Sunday sales.

If adopted by the legislature, Indiana would be left as the only state with a total ban on Sunday liquor sales. A series of local referendums in Georgia last fall opened most of that Baptist state to the sale of alcohol on the Christian Sabbath.

The steady national trend toward Sunday liquor sales seemed to make seven-day-a-week sales inevitable in Connecticut, but the package-store owners were well-organized.

Last year, an effort by Representative Kathy Tallarita, D-Enfield, to legalize Sunday sales was killed in committee. She and Senator John Kissel, R-Enfield, predicted that Gov Malloy’s adoption of the issue would change the politics.

They stood Saturday with Gov Malloy, Lieutenant Governor Nancy Wyman, and Representative David Kiner, D-Enfield, at a news conference in Enfield Town Hall to announce the administration’s proposals, the outline of which were released one day earlier.

“It s a tremendous feeling to be here today and having the backing of the governor and lieutenant governor and their administration,” Ms Tallarita said.

“By my last reckoning, I think he is about 100 percent in the things he wants in the legislature,” Sen Kissel said of Gov Malloy. “So, that’s really good news.”

The issue crosses party lines.

In border communities like Enfield, where merchants say they lose business to Massachusetts on Sunday and holidays, Sunday sales generally has been supported by local lawmakers.

Massachusetts allows stores to remain open until 11 pm daily. In Rhode Island, closing time is 10 pm during the week and 6 pm on Sunday. New York allows beer sales 24 hours a day and wine and spirits until midnight except on Sunday, when sales stop at 9 pm.

Closing time in Connecticut is no later than 9 pm, with no sales allowed on Sundays, holidays, or the Monday after Sunday holidays. Gov Malloy’s proposal would allow stores to open on Memorial Day, July 4, and Labor Day and Mondays after Sunday holidays.

Dominic Alaimo, the owner of the Freshwater package store in Enfield, who has criticized store owners in the rest of the state as lazy and interested in protectionism, said the changes are overdue. He blamed Mr Hughes for killing the Sunday sales bill every year.

“We finally got a governor who is doing the right thing. He is pro-business. He doesn’t care what their lobbyist is saying,” Mr Alaimo said. “We’re the only business in the state that can’t open on Sunday.”

Mr Hughes did not attend the press conference. In the past, he has said that longer hours and Sunday sales would be a burden to many small, family-owned stores. He also has warned of a social cost in more accidents caused by drunken driving.

But representatives of beer and wine wholesalers came to praise the proposed changes that they said will capture business now going over the border and allow more competition on price. Their support is not surprising. To the wholesalers, more business means more revenue — without any increased cost of doing business.

Jay M. Hibbard, who oversees government relations in the Northeast for the Distilled Spirits Council of the United States, said, “It does what people look to government to do — to allow people to make choices for themselves.”

“We need to be more competitive,” said Jude Malone, the new executive director of the Connecticut Beer Wholesalers Association. She was accompanied by two of her lobbyists, Bob Shea and Tony Camilliere.

Based on information from the industry, the Gov Malloy administration estimates that sales in Connecticut could increase by between four percent and eight percent, yielding between $6.4 million and $11.2 million in annual tax revenue.

“We can’t afford the lost revenue, and the businesses in this year can’t afford the lost revenue,” Lt Gov Wyman said.

The governor said it is rare for legislation to both increase tax revenue, while saving consumers money.

“That’s kind of known as a win-win,” he said.

The governor’s proposal also would allow bars and restaurants to sell alcohol until 2 am, subject to local controls.

Gov Malloy dismissed concerns about a social cost of making liquor easier to buy. In states with laws similar to what he is proposing, there is no higher rate of accidents involving alcohol.

“This was a Blue Law, let’s be honest,” Gov Malloy said. “It was reflective of another time and another age, when people lived differently.”

This material originally appeared at CTMirror.org, the website of The Connecticut Mirror, an independent, nonprofit news organization covering government, politics, and public policy in the state.