This legislative session, Gov. Dannel Malloy is proposing an overhaul of the way
And while one aspect of his plan has drawn the most attention, , it is a variety of other changes that will have a huge effect on the package store industry, Connecticut Package Store Association President Alan Wilensky said Tuesday.
“Our numbers show that if this is passed, we will see a wave of closures in the first year,” said Wilensky. “And within three years, the locally owned package store will be mostly gone.”
Under the current laws, alcohol is sold to all licensed buyers in the state at the same price. So if, for example, a keg of Budweiser is being sold for $50 (not the real price), all licensed buyers in the state can buy that keg for $50, regardless of how many they buy.
Malloy is proposing to eliminate that regulation. That would allow bigger companies that buy more alcohol to get a discount for buying in bulk, thereby allowing them to sell the same product for less.
“They are going to jack up the prices against me if I’m just buying five or 10 cases of beer,” said Wilensky, who owns Max’s Package Store in East Lyme. “Whereas will be able to work out a deal because they are buying 1,000 cases of beer.”
This will also limit the variety in stores. If buying in bulk saves money, owners will buy more of one product rather than a variety of products, Wilensky said.
“Right now, I sell 70 different vodkas,” he said. “If this is passed, I’ll sell three.”
Currently, people are allowed to own two package stores. Malloy is proposing to allow people to own up to six package stores. Also, he is proposing to eliminate the law that says stores cannot sell alcohol products for less than what they bought them for, as a way to entice customers.
Wilensky is opposed to all of this, along with several other aspects of the proposal that he says favors big businesses over small ones. The larger point is that Malloy is trying to get this through in two months, when an overhaul this dramatic should take at least two years, Wilensky said.
“He is trying to fix something that really isn’t broken,” Wilensky said. “Because there is a perception by the governor that there is a problem. And there really isn’t.”
Good For The Consumer?
Many of the regulations that exist in the package store industry are unique to the package store industry, such as limiting the number of package stores a person can own to mandating all manufacturers selling at products at the same price, regardless of the size of the order. That is the way it should be, because alcohol is a “special product,” Wilensky said.
“It is not like milk or Pepsi, it is a regulated substance,” he said. “We limit who can buy it, and we limit who can sell it.”
By removing many of these regulations, it could push down the cost of alcohol to consumers, at least for a period, Wilensky said. But it also will put hundreds of store owners out of work and greatly limit the variety of alcohol products being sold, he said.
“The vast number of local, independent stores will cease to exist,” he said. “At that point, what you get is limited selection and the control of the pricing of the market.”