Connecticut Governor’s Budget Bill Busts Liquor Price Floors

Published April 24, 2017

Connecticut residents may say “cheers” to a proposal in Gov. Dannel Malloy’s (D) proposed budget agenda.

The Connecticut Senate Finance, Revenue, and Bonding Committee held a public hearing in March to consider Senate Bill 787, sponsored by state Sen. Martin Looney (D-New Haven), to enact Malloy’s proposed budget for fiscal years 2018 and 2019.

Malloy’s budget agenda includes language removing government price controls on alcohol and liquor products sold to consumers. Currently, Connecticut is the only state in the nation with government-mandated minimum prices for alcohol sold to consumers.

Cheers to Pro-Consumer Reform

Patrick Gleason, director of state affairs with Americans for Tax Reform, says consumers should raise their glasses to Malloy’s proposed liquor law reform.

“Consumers will benefit from lower prices and increased disposable income, which is especially important for Connecticut residents who contend with the second-highest tax burden in the nation,” Gleason said.  

Gleason says the current price floors benefit well-connected insiders at the expense of consumers.

“There are some liquor stores in Connecticut who claim they can’t continue existing if the state government stops forcing their competitors to charge artificially high prices,” Gleason said. “Operations that can only survive under such an anti-consumer, convoluted business model will rightfully need to readjust or find another line of business.”

Competing for Consumers’ Cash

Joseph Horvath, assistant policy director for the Yankee Institute, says increasing competition for consumers’ booze money would benefit everyone, even business owners.

Eliminating minimum bottle requirements simply allows for more competition,” Horvath said. “Every store will have the opportunity to adapt and compete in a fair market. The best business owners will find a way to succeed the way they always do. It isn’t the proper role of government to set prices. The market will always do that better.”

Calling for Expansion

Horvath says lawmakers should apply the logic of removing liquor price controls to other regulations holding back consumers and businesses.

“The logic that underpins this policy is that government interference has been bad for consumers, and, by eliminating an intrusion into the marketplace, the state benefits,” Horvath said. “That concept should be translated to other areas and to the benefit of other groups. If price controls that regulate how you sell your product are bad, perhaps the state should look at [eliminating] regulations that govern how you run your business.”