Editorial: State minimum alcohol pricing should be removed

Connecticut has had minimum alcohol prices in effect for decades. These rules were originally intended to ensure that small stores could compete with the bigger chains, by ensuring that huge stores like Walmart could not sell at lower prices that smaller stores could never charge. The intent was well-meaning, but the time to end it is now.

Such a policy change is what Gov. Dannel Malloy is proposing this year. In fact, such a policy change is what he proposed last year as part of his broader alcohol reform bill, although that specific provision was eliminated due to outcry from the small business community. The bill as a whole did pass last year, notably allowing Sunday alcohol sales for the first time, leaving Indiana as the only state in the country still banning the practice. But now Malloy has introduced the measure as a stand-alone bill.

The Hartford Courant notes that Massachusetts has “no sales tax on alcohol, lower excise (built-in) taxes, and no law that forbids stores from selling a product below its wholesale price.” And the Connecticut Post determined that “the price-fixing… inflates the price of wine by as much as $7 a bottle and liquor by $9 a bottle compared to neighboring states.” Connecticut, long known as a consumer-unfriendly state, is certainly not helping that reputation with these practices.

Small and family-owned liquor stores counter that without these policies, consumers would all go to larger stores for alcohol purchases, leaving small businesses in the dust. But here’s the problem: for the 50 Connecticut towns that border either New York, Massachusetts or Rhode Island, they are likely purchasing their alcohol from across state lines – leaving both small and large Connecticut businesses in the dust.

So far, results from last year’s more flexible and free-market state alcohol reforms have proved relatively positive. Even the small businesses, while not exactly enamored with the 2012 legislation, have largely conceded that the alterations were not as catastrophic as they originally conceived. It is time for the same thing to happen this year with minimum alcohol pricing.