2 liquor store chains defying state law

Companies protesting Connecticut minimum bottle pricing rules

A second large liquor store chain has begun selling certain kinds of wine and spirits at less than the minimum price, violating a long-time state law.

Executives with Stamford-based BevMax said Monday they will begin selling certain products at its Connecticut stores at prices that are less than minimum prices require by state law. The chain has 11 Connecticut stores including in Hamden, West Haven and Meriden.

The move by BevMax comes almost week after Maryland-based Total Wine & More announced that it was filing a lawsuit against the state of Connecticut, claiming the state’s minimum pricing laws for wine and spirits are anti-competitive and violate the federal Sherman Anti-Trust Act. Total Wine & More began selling certain products at less than the statewide minimum prices at that time.

William Berkoff, vice president of BevMax, said his company has tried to follow the laws of the state and will not be joining the Total Wine & More lawsuit. But Berkoff said his company is justified in its open defiance of the state’s minimum pricing law.

“If someone else is going to sell products at below minimum price, then we feel its appropriate to do the same in order to protect our market,” he said.

The decision puts both companies in direct violation of state law. Leslie O’Brien, a spokeswoman for the Connecticut Liquor Control Division, said the agency has launched investigations into the actions of both retail chains. O’Brien declined further comment because of the ongoing investigation, including how long it might take to complete.

Carroll Hughes, executive director of the Middletown-based Connecticut Package Stores Association, last week lodged a formal complaint with the liquor commission and urged the agency to take swift action to uphold the state’s minimum pricing law.

“Our stores have always accepted and supported what the legislature has directed,” Hughes said. “Our stores have always accepted and supported what the legislature has directed and endorsed. It is our contention ... that you have the ability to fine and suspend their permits for the violation of minimum bottle pricing. I am sure there will be no exception here.”

The 35-year-old law prohibits wine and spirits from being sold at below cost, with just a few small exceptions. One such exception includes allowing retailers to sell one type of alcoholic item per month below the otherwise minimum price, but only up to a 10 percent discount.

Officials with the trade group had no further comment on Monday regarding BevMax

Ed Cooper, Total Wine & More’s vice president of public affairs and community relations, called minimum pricing a “scheme.” Total Wine & More has four Connecticut locations: Milford, Norwalk, West Hartford and Manchester,

“(It) creates big profits for package stores all over Connecticut paid for by consumers being overcharged,” Cooper said Monday in a statement regarding the state’s minium pricing laws. “Filing suit against the state and selling a select group of wines and spirits above cost but below an unconstitutional minimum price is our form of protest. We hope that the Attorney General’s office agrees and will issue direction on this matter to the Department of Consumer Protection’s Division of Liquor Control soon.”

Jaclyn Falkowski, spokeswoman for Connecticut Attorney General George Jepsen, said he is representing the state in the lawsuit filed by Total Wine & More. Enforcement of the law in this case is the responsibility of the Division of Liquor Control.

Meg Green, a spokeswoman for Gov. Dannel P. Malloy, called the minimum pricing laws “backwards.”

“Connecticut consumers artificially pay more in our state for products that they can easily obtain for less in neighboring states,” Green said. “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.”

But Green noted that at the same time, the Division of Liquor Control — which is part of the state’s Department of Consumer Protection — “is fulfilling its statutorily required duty to investigate potential violations and enforce the current law.”

Michael Berkoff, BevMax’s chief executive officer and William Berkoff’s brother, said company officials are reviewing Total Wine & More’s lawsuit

“Connecticut is the only state in the nation that imposes government mandated minimum pricing for liquor,” Michael Berkoff said in a statement. “BevMax has long believed that this policy to be unjust and has tried by all legal means to change the law.”