Does Malloy liquor plan open the door to Walmart-like package stores?

WalmartOn the surface, Gov. Dannel P. Malloy’s plan to shake up the liquor industry in Connecticut, again, makes a lot of sense. The governor even claimed the current system is tantamount to “price gouging.”

“I want to be very clear. That’s what(if the legislature rejects his plan) that decision is. If this doesn’t pass the committee, if it doesn’t pass the House and it doesn’t pass the Senate, what that is, is a vote for our consumers paying more for a product that they can obtain in neighboring states,” he said.

Carroll Hughes, the lobbyist for the Connecticut Package Store Association, quickly pounced on Malloy’s “gouging” statement. He blamed the state’s tax structure for the higher price of alcohol. Maybe. Maybe not.
Massachusetts, where some Connecticut consumers buy their booze, does not charge a sales tax on alcohol, but there is an excise tax liquor store owners pass along to buyers.

The real issue is the future of mom and pop package stores in Connecticut. If Malloy’s plan is adopted intact, not only would owners be able to price their booze at the lowest possible cost – provided it doesn’t dip below the price at which they purchased it – but they would be permitted to own up to six package stores in the state. That will pave the way for Total Wine and other chain package stores to march into the state and decimate the small package stores.

Such a scenario may be good for buyers of alcohol, but then Malloy and those who support his plan, can’t be standing outside of Walmart and the big box retail outlets that drove other mom and pop retail stores out of business, protesting what they pay their employees. After all, one of the reasons those businesses have succeeded at the expense of the smaller stores is because consumers do not want to be “paying more for a product than they can obtain” at a bigger store.

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Two questions: why should package store owners enjoy protections from competition that no other retail sector enjoys and; should we pay 20-30% more just to keep small package store owners in business?