Finally, a store that competes on price, vintage & lobbyist
Finally, a store that competes on price, vintage & lobbyist
America's leading wine retailer, Total Wine & More, opened its first outlet in Connecticut Dec. 6, hiring 50 employees to staff a 35,000-square-foot superstore in Norwalk.
With 88 other stores in 15 states, Total Wine tends to be a game-changer wherever it goes, offering everything from a $1.49 California sparkler to a Bordeaux that fetches $14,999. But its variety of 8,000 wines, 3,000 liquors and 2,500 beers is not enough to reshape the Connecticut market.
For that, they have hired Peter Smith, a lobbyist in Hartford.
The reason is that minimum prices in Connecticut are set by law, not by retailers.
The entrance of Total Wine into the state adds another voice, one backed by more than $1 billion in annual sales and a reputation as an aggressive and savvy marketer, to the push by Gov. Dannel P. Malloy to increase competition in the retail liquor business.
"We don't allow people to fix prices in other industries," Gov. Dannel P. Malloy said Tuesday. "It doesn't make any sense."
Malloy succeeded last year in repealing the ban on Sunday liquor sales, but the legislature rejected his ideas for opening the tightly controlled market by loosening laws on pricing and chain ownership.
It was a victory for the state's well-organized, mom-and-pop package stores, long represented by lobbyist Carroll Hughes, who led his clients in a strategic retreat: They ceded the Sunday issue to Malloy, but regrouped around minimum pricing.
Their lines held. Malloy's pricing ideas never made it out of the legislature's General Law Committee.
The governor is trying again this year with a more modest effort: He wants to bar the minimum bottle price of liquor and wine set by wholesalers, saying it could produce another $2.6 million in tax revenue.
It is not expected to pass this year, though it was up for a public hearing Tuesday by the General Law Committee. Package store owners filled the Legislative Office Building's atrium, signing up to oppose the bill.
Package store owners are asserting their rights under an unwritten rule that suggests that the General Assembly leaves an industry alone the year after forcing a major change, such as Sunday sales.
"That was their message: Can we have a year off?" said House Majority Leader Joe Aresimowicz, D-Berlin, who recently met with package store owners in his district.
The package store owners say that opening on Sunday has cost them $7.7 million in staffing and other expenses, though the law permits them to open every day, not require it.
They say sales did not appreciably increase, an assertion disputed by William Rubenstein, the commissioner of the Department of Consumer Protection.
He says state retail sales jumped by 179,588 gallons of wine, 192,607 gallons of spirits and 993,330 gallons of beer in 2012 after Sunday sales began in May.
The administration and package stores also differ on the significance of the minimum pricing law to consumers. A survey by Hughes showed similar prices on many brands, but the administration says 1.75 liter bottles of Skyy Vodka and Jack Daniels that cost $17.59 and $33.99 in Massachusetts carry a minimum price in Connecticut of $23.99 and $41.99.
Last year, Malloy not only wanted to repeal minimum pricing laws, he wanted to essentially deregulate a heavily regulated market by permitting a greater degree of chain ownership and allowing beer sales by convenience stores.
Rubenstein said the proposal this year would keep a reasonable form of minimum pricing: a retailer could not sell for below cost.
Connecticut is the only state that so closely regulates pricing, according to Kevin Sullivan, the state commissioner of revenue services.
The entry into Connecticut by Total Wine was an education for a chain that builds every store around a tasting bar, where food is served and wine aficionados can also select fine cigars from a walk-in humidor.
Original plans for a grand opening in Norwalk with catered food and live music were abandoned -- food and music can't be mixed with retail liquor sales. The retailer also gave up on stocking cigars wrapped in Connecticut shade tobacco.
State law allows the sale of cigarettes by package stores, not cigars.
"I've done liquor licensing issues for the casino," said Smith, who also represents the Mohegan Sun. "But I've never represented a retailer. As a citizen of the state of Connecticut, it is eye-opening."
Smith is a new voice to the long, long conversation in Hartford about the rules for booze, one of seven new lobbyists on liquor issues, by Hughes' count.
Beer wholesalers, brewers and wine interests also have signed up lobbying help.
But Total Wine, as an experienced marketer that refers to its emporiums as "a toy store for adults," seems to be the player to watch. It also has hired the public relations firm of Duby McDowell, the former political reporter for WFSB and NBC30.
The chain is seeking a liberalization of minimum pricing rules, permission to sell cigars, and fewer restrictions on wine, beer and spirit tastings. Under current law, no store can offer samples from more than four bottles.
Arthur DiSisto, the wine manager at Total Wine's Norwalk store, calls the rules archaic.
Hughes calls Total Wines a great retailer, but he says that most of his clients, especially the small shops with limited sales volumes, are wary of further deregulation this year on price. Small independent retailers have been squeezed in other market segments.
"It's drugstore vs. CVS. It's hardware store vs. Home Depot," he said.
"It's not us vs. them," Smith said of Total Wine and the smaller package stores. "From our point of view, this is a bill about the consumer."
No store can compete with Total Wines on variety, and few want to try on price -- even under current law. Its recommended selections this month include a $6.99 bottle of Merlot from Radius, a vineyard in Washington, and a Rock View Riesling for $4.99.
If you're curious about the $14,997 Bordeaux, it's currently out of stock. So is the 2005 Chateau Petrus Pomerol, which was priced at $4,499. Still available are bottles of the 2003 Chateau Petrus. For $3,099, it promises an "extraordinary nose of berry, chocolate and flowers."
Or, just grab a bottle of the Cloud Break Pinot Noir.
It comes with fewer superlatives, just an aroma of strawberry and raspberry, with notes of vanilla. But it has an attribute more concerning to Total Wine's smaller competitors.
It costs $4.99.