Total Wine & More has filed a lawsuit challenging the state’s minimum price requirements for wine and spirits.
In a press release, the company that operates more than 150 liquor superstores in more than 20 states announced the lawsuit, filed Tuesday in United States District Court for the District of Connecticut. The company said the suit is in response to customer demands for fair prices on wine and spirits.
"I don't think there's any customer in the state of Connecticut that, if they knew about it, they would support this law," Edward Cooper, vice president of Total Wine & More, said.
Current Connecticut law states that wholesalers and retailers must together set the minimum price consumers pay.
The current law also prohibits unfair pricing practices, which is defined as selling "at a price the intent of which is to destroy or prevent competition with any other permittee holding a like permit." The Department of Consumer Protection can pull permits of anyone it finds, after a hearing, of committing unfair pricing practice.
Gov. Dannel Malloy has been trying for the past two legislative sessions to change the laws, but the measures were not passed.
"There is no question - Connecticut consumers artificially pay more in our state for products that they can easily obtain for less in neighboring states. The laws are backwards. That's why Governor Malloy has supported changes to Connecticut's minimum bottle law to address this very issue almost every year he's been in office. He stands with consumers," a spokeswoman for the governor, Meg Green, said in a statement.
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Independent liquor stores, however, said they need the minimum pricing laws so they can compete with big box stores and stay in business.
"The small guy is going to go out of business because we cannot survive and once everyone goes out of business, they're going to jack up the price and they can be king," Sanjay Shay, the manager of Buy-Rite Liquors, said.
“It's all about big box putting the little guy out of business,” said Connecticut Package Store Association Board of Directors member John NeJamie. “They have plenty of money to waste getting what they want that will end up with more stores closing and more people on unemployment. Once they get us out of the way their prices will go back up.”
NeJamie also said that state excise taxes are part of what drive prices up. “There's over $5 of tax on a 1.75 liter bottle. Go ahead and remove those taxes and our prices which are competitive now would be incredible compared to our neighboring states,” he said.
The lawsuit Total Wine & More filed claims that Connecticut’s mandatory minimum pricing rules result in prices that can be more than 25 percent higher than prices in neighboring states. It also argues that setting a minimum price by wholesalers and retailers is a violation of the federal Sherman anti-trust act.
