This morning one of my Twitter tweeps circulated a Change.org petition asking Connecticut governor Dan Malloy to reject retail liquor reform:
The Connecticut legislature recently introduced a bill that will endanger your local, independently owned wine and spirits shops. Governor Malloy would like you to think this bill is only about allowing Sunday sales, but its impact is much greater than that. Rather than protecting small businesses and their employees, this is a nod to out-of-state big-box stores such as Wal-Mart, Target, Costco, and major supermarket chains.
Under Governor Malloy’s proposed legislation, supermarkets, big-box stores and even gas stations could go into the package store business. … Seven THOUSAND Connecticut residents would face unemployment, and hundreds of small, family-owned package stores would be run out of business.
Background if you live outside the state: Connecticut is one of only two states (the other is Indiana) that doesn’t allow retail sale of alcohol on Sundays (you can still go and have a drink at a bar, though). You might think this is a throwback to our Puritan history — as I originally did when I was a newcomer — but you would be wrong: every few years, a proposal to allow Sunday sales takes flight only to be ack-acked from the skies by the Connecticut Package Stores Association, a powerful lobbyist group. Package stores argue that Sunday sales would give supermarkets and other venues an unfair advantage since they are already open on Sundays, so they have little if any extra operational costs; whereas if package stores have to open on Sundays to compete with them, the packies have to bear an extra day’s worth of wages, heating, electricity, etc. The ban on Sunday sales is plain industry protectionism.
There are several flaws in the CPSA’s argument, the most obvious being their muddy math. Opponents of Sunday sales contend that currently Connecticut experiences 7s worth of sales spread over 6 days. In other words, sales of the alcohol consumed on Sunday is distributed over the rest of the week. By opening Sunday sales, they say, consumption and sales will not increase but instead be spread over 7 days (so 7s over 7 days), thereby increasing their operational costs for being open on that seventh day with no new profit to show for it.
This is zero-sum thinking. It assumes we’re seeing the maximum amount of sales there can possibly be in the state.
What Malloy and others are saying — and I happen to agree — is that while this may be true for the interior of the state, along our outer rim what we’re actually experiencing is 6s worth of sales over 6 days, and in fact an extra 1s of Sunday sales goes to liquor-license holders and governments in Massachusetts, New York, and Rhode Island. With Sunday sales, consumers will no longer have to run for the border. So instead of experiencing 6s over 6 days, Connecticut will see 7s over 7 days, reaping the profits and tax revenues resulting from that extra day of business. Put another way: Sunday sales will actually benefit the very same people who oppose it. The proponents’ calculation, albeit probably exaggerated, concludes s = $500 million.
Even if supermarkets and box-stores were to offer wine and spirits, what makes the petitioners think they would suddenly sweep their shelves clear of dog biscuits and detergent to stock anything more sophisticated than Yellow Tail and Jack Daniels? Right now, Connecticut supermarkets sell beer six days a week. But shelf space limits the selection to common denominators: Coors, Bud, Corona. Samuel Adams and Sierra Nevada are as artisanal as it gets. BJ’s already offers wine and spirits, but with a like lack of choice; I assume other wholesale clubs are the same. The beer selection at Whole Foods is comparable to a packie but you also pay an extra few bucks per six-pack for the convenience. And you can forget about cider at any of them. Yes, package stores would lose some sales to these markets — just as they already do with beer six days a week. Yet they persevere. Mrs. Kuhl patronizes her favorite shop because of their wine selection and recommendations; I go to another because of its variety of cider. In an America where urchins sold hard lemonade on every street corner, there would still be a niche for stores with diverse inventories staffed by knowledgeable people. It’s called selection and service.
As it turns out, the Connecticut Package Stores Association suddenly agrees that Sunday sales aren’t the industry death knell they’ve always said they are:
The longtime lobbyist for the package stores, Carroll Hughes, said that Malloy’s far-reaching bill could cause hundreds of package stores to go out of business if all of the proposals are approved by the legislature. By agreeing to support Sunday sales, Hughes said, he would focus on blocking other aspects of the bill that would harm the package store owners.
The CPSA instead wants to stop supermarkets and big-boxes from going full liquor and to limit selling hours for everyone. It’s classic negotiation, Lemon. By making vast demands, Malloy has forced the CPSA to submit to one aspect of the free market in exchange for other protectionist safeguards. All the governor has to do now is concede backwards to what he wanted in the first place.