Opposed by the state liquor lobby in the past, Governor Dan Malloy has proposed a bill to lift liquor pricing regulations that prevents retailers from setting “the prices of the products that they put on the shelves in their own stores …” If we had a law that forced stores to sell bread for a price that was determined by state government, people would be screaming about capitalism and big government. But for some reason, we allow this anti-free market mandate to continue for this one particular industry–and we are in fact the only state in the nation that operates in this manner.”
News release from Malloy:
Governor Dannel P. Malloy today announced that he has submitted a legislative proposal to the Connecticut General Assembly that will update an antiquated state law that currently forces the owners of certain retail stores to sell their products at artificial prices set by liquor wholesalers, resulting in unnecessarily high prices for consumers.
Connecticut is the only state in the country that has a law mandating that the retailers of alcoholic beverages sell their products at a minimum price above wholesale cost determined by the wholesaler industry. This means that–unlike everywhere else in the nation–these retailers cannot set the prices of the products that they put on the shelves in their own stores. As a result of this law, which the state adopted in 1981, the artificially determined prices typically end up being higher than the prices that these products sell for in nearly every other state in the country, forcing Connecticut residents to either pay more money or travel to a bordering state where the identical products are sold at a lower price.
“If we had a law that forced stores to sell bread for a price that was determined by state government, people would be screaming about capitalism and big government. But for some reason, we allow this anti-free market mandate to continue for this one particular industry–and we are in fact the only state in the nation that operates in this manner,” Governor Malloy said. “Because of this law, business owners have fewer rights in determining the operations of their businesses, and consumers are forced to pay artificially inflated, high prices for products that are sold at a substantially lower price nearly everywhere else. Let the businesses determine the prices for these products, not the government.”
As an example of how Connecticut consumers are forced to pay higher prices because of this law, the Governor pointed to an advertisement that a Massachusetts chain of retail stores paid to have published in the December 18, 2016 edition of the Hartford Courant targeting Connecticut residents and encouraging them to drive over the state border where they can buy products at significantly lower prices. The advertisement includes an extensive list of products and compares how much they cost at Massachusetts stores to how much the identical products are legally mandated to cost within the State of Connecticut.
Under the legislation Governor Malloy introduced, the existing law would be modified to allow small business owners to sell wine and liquor using a more reasonable, logical criteria: actual cost paid. This is the standard used in each of Connecticut’s neighboring states and nearly everywhere else throughout the country, where many small package stores continue to thrive.
The Governor’s legislation is Senate Bill 789, An Act Concerning the Regional Competitiveness of Connecticut’s Alcoholic Liquor Prices. It has been referred to the legislature’s General Law Committee, where it is currently pending for consideration by lawmakers.