Gov.'s proposed law to allow small business owners to determine - WFSB 3 Connecticut

Gov.'s proposed law to allow small business owners to determine prices of liquor

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Gov. Dannel Malloy said it's time to stop forcing small package store owners to sell their products at higher prices required by the government. (WFSB file photo) Gov. Dannel Malloy said it's time to stop forcing small package store owners to sell their products at higher prices required by the government. (WFSB file photo)
HARTFORD, CT (WFSB) -

The governor said it's time to stop forcing small package store owners to sell their products at higher prices required by the government.

Gov. Dannel Malloy submitted a proposal to the Connecticut General Assembly, looking to update the current laws.

According to the governor's office, Connecticut is the only state that mandates "the retailers of alcoholic beverages sell their products at a minimum price above wholesale cost determined by the wholesaler industry." His office said that means Connecticut retailers "cannot set 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,” Gov. Dannel P. Malloy said in a statement on Monday.  

The governor's office said these problems for small business owners started with a law adopted in 1981.

The law "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."

“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," Malloy said in a statement on Monday.

Dave Gajraj, manager of MK's Wine and Spirits in Rocky Hill, said he has been competing with his neighbors, big and small, for the past two years.

"We are a small, local liquor store. We have a great local following and that's the roots of America," Gajraj said. "If the state minimums drops, there is no way we can compete."

The governor's office explained examples of how Connecticut residents pay more. He said there was an advertisement by a Massachusetts chain of retail stores that urged customers to cross the border to buy liquor at "significantly lower prices."  

The proposal by Malloy would modify the law to "allow small business owners to sell wine and liquor using a more reasonable, logical criteria: actual cost paid." The governor's office added that this proposed law is a "standard used in each of Connecticut’s neighboring states and nearly everywhere else throughout the country, where many small package stores continue to thrive." 

To read the Senate Bill 789, click here

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