New Canaan liquor merchants not phased by potential elimination of minimum bottle pricing
NEW CANAAN — Town mom and pop liquor stores are rejecting claims that by lower the price of booze people will buy more.
As the state looks to make up some of its $1.3 billion deficit, proposed cuts and tax increases from Hartford are raising some eyebrows and reigniting ongoing debates.
In his Fiscal Year 2018-2019 Biennial Budget, Gov. Daniel P. Malloy proposed modifying the state’s minimum bottle pricing law, which allows the state to assess fines to sellers of alcohol who don’t adhere to the rule. According to Carroll Hughes, founder of the lobbying firm, Hughes and Cronin, this modification would eliminate the definition of “minimum bottle cost,” essentially eliminating the minimum bottle price.
The hope is this decrease in alcohol prices would lead to more alcohol purchases and more excise tax. According to Malloy’s proposal, this modification would add $1.9 million in revenue in 2018 and $2.5 million in 2019. Some, however, don’t agree.
“What he’s proposing, quite honestly, is probably a revenue reduction more than anything else,” Hughes said. “We’d have to sell about 11 million bottles of vodka to equal 1.9 million in excise tax which is almost preposterous. It’s making assumptions that people spend around $220 million in liquor sales.”
The law has been largely reviled by chain retailers, like Total Wine and More and Bevmax, who say it hurts their business. But owners of smaller, independent stores, have generally defended the rule. Malloy, for his part, has introduced legislation in the past to eliminate the rule, though it was never adopted.
Edward Cooper, head of public affairs for Total Wine and More, supported the potential change.
Additional reporting contributed by Erin Kayata.
“We think that the current price system in Connecticut is unfair and unconstitutional, quite frankly. And it artificially inflates prices for customers. That’s not right. Customers deserve to get not only great selection and service but the best prices they can get,” Cooper said. He added that modifying the current law might deter Connecticut customers from going over state lines, where prices are often lower, to purchase their alcohol.
However, some liquor store owners in New Canaan are not particularly concerned about the potential elimination of the rule.
Rick Franco, who co-owns with his brother Carl, Franco’s Wine Merchants on Elm Street, said that even in the event that the rule is changed and his competition was able to drop their prices, it would have no effect on the way in which he conducts his business.
“It’s all about presentation. It’s what you present to the consumer in the way of uniqueness. I think price is modestly second,” Franco said. “But service, the sort of wine you offer, understanding of the product — that is what matters to a certain type of consumer,” Franco said.
All of New Canaan’s liquor stores are independently owned, so the threat of being undercut by a chain retailer like a Bevmax is not as legitimate as in many other parts of the state. When asked if New Canaan’s affluence might insulate stores like his from being heavily impacted by such a modification, Franco said he didn’t believe it was a factor.
“As with other communities similar to New Canaan, we have an educated consumer and so we try to give them the answers to questions they may have. But not everyone is always interested in that, regardless of their socioeconomic stature. There are a number of wealthy people that just want a $10 bottle of wine on the table,” Franco said.
Jeff Barbour, the owner of New Canaan Wine Merchants on Pine Street, said he didn’t think it Malloy’s proposal would have much of an effect on business.
“It if goes through, it goes through. What can you do?” Barbour said.
Ultimately, for sellers like Franco, who have an established customer base, the potential elimination of minimum bottom pricing doesn’t, at this point, appear to be particularly consequential.
“This is the oldest store in Connecticut, we opened the first day of repeal. We know what we’re doing. The consumer will be fine,” Franco said.