Conn. to consider overhaul of alcohol sales laws

HARTFORD, Conn. (AP) - Package stores that are fixtures in every town and city in Connecticut are about to become the focus of state legislation rewriting how the liquor businesses are regulated.

Gov. Dannel P. Malloy says he wants to modernize Connecticut's liquor laws with proposals to remove price restrictions requiring distributors to offer the same price to all retailers. Removing the restrictions would give retailers more flexibility and reduce the retail price for consumers, Malloy says.

His proposals also would establish a statewide licensing system using medallions that set a maximum number of permits at the state level and allow owners to operate nine package stores, up from two currently permitted.

More package stores would promote increased competition and flexibility among store owners, he said. Currently, 1,222 package stores operate in Connecticut, according to the Department of Consumer Protection.

Malloy, who said some Connecticut laws regulating the sale of alcohol date to back to Prohibition, also will ask the legislature to allow booze to be sold on Sundays, certain holidays and on Mondays following Sunday holidays. Sunday sales are a perennial issue that has failed in the past, but is now part of a broader set of recommendations that Malloy says will help Connecticut stay competitive with neighboring states and benefit consumers.

"These laws are outdated and they artificially increase the price of alcohol to Connecticut consumers," the governor said as he unveiled his proposals in January.

Sunday sales also could boost business by 4 percent to 8 percent, generating between $6 million and $11 million in tax revenue, Malloy said.

A state legislator who represents a district near Massachusetts supports the proposals, which she said will help Connecticut stores be more competitive with their counterparts in the Bay State that operate under more liberal rules. For example, in November 2010 Massachusetts voters repealed the 6.25 percent sales tax on alcohol, making liquor cheaper than across the line in Connecticut.

"We're so close to Massachusetts, we're losing business not just on Sundays but every day of the week," said Rep. Kathleen M. Tallarita, D-Enfield.

But some package store owners promise to fight Malloy's proposals. Mary Edgerton, who with her husband Mike, bought a 69-year-old package store in Groton last fall, said the proposed change in the price structure would favor big-box stores at the expense of small businesses, she said.

"It would drive the little guy out of business," Edgerton said.

The proposed system using medallions will make it easier for giant retailers to operate freely around the state, including next door to a package store, she said.

Malloy said his proposal has the potential to foster a market of medallion purchasers for package store owners who want to sell their medallions. Tallarita said the medallions would add value to package store permits.

Carroll Hughes, a lobbyist for the Connecticut Package Stores Association, said he would not comment on specifics of Malloy's legislation because it has not yet been introduced.

"Everybody is very dramatically concerned about the negative aspects," he said. "It's just a natural human reaction."