Hartford Business Journal

20 Hartford Business Journal • March 16, 2015 www.HartfordBusiness.com OpiniOn & Commentary editorial Time to do away with minimum-pricing law S mall package store owners flocked to the State Capitol last week protesting Gov. Dannel P. Malloy's plan to extend liquor store hours and undercut arbitrary minimum-pricing laws. While we feel for these small businesses that face increasing economic pressures, they are fighting a losing battle. In the 21st century, it's tough to argue in favor of Connecticut's arcane liquor laws. Minimum pricing is anticompetitive and smacks in the face of free-market capitalism. The law, which has been on the books in various forms for decades, artificially sets liquor prices by prohibiting retailers from selling a bottle of alcohol below cost. The cost is equal to the wholesale bottle price plus shipping and delivery charges. Minimum pricing does little more than increase the cost of alcohol and protect small package stores by ensuring they can keep their prices more competitive with larger retailers. In written testimony to the Finance, Revenue, and Bonding Committee last week, Edward Cooper, vice president of public affairs and community relations for Total Wine & More, which has a location in Norwalk, said the state's minimum-pricing law tacks on up to $8 more on 1.75-liter bottles of alcohol. We understand why small package stores are lobbying hard against changes to minimum-pricing laws and expanded hours, which they argue only adds to their costs without generating significantly more revenue. They are fighting for their surviv- al, and if large alcohol retailers, including supermarkets, can offer price discounts or charge whatever they like, it will be harder for small package stores to compete. Large retailers, package store owners argue, will undercut their prices, like they do on other items, simply to get customers in the door. That may happen, but that's how the free market economy works. The onus will be on package store owners to rethink their business model and adapt. That is what busi- nesses in most other U.S. industries are required to do in this age of constant change and technological advances. The one area where package store owners have a legitimate gripe is their complaints that Connecticut's excise and sales tax makes them less competitive with liquor stores in nearby states. That may be true, but at least all Connecticut alcohol retailers must pay the same tax rate, making it an even playing field. Trying to advocate for lower tax rates in the current fiscal climate is a lost cause (in fact, part of Malloy's liquor law reforms aim to raise additional tax revenue — about $3.3 million — to help close a projected $1.3 billion deficit next fiscal year). To be clear, higher costs created by minimum pricing don't break the piggy banks of most Connecticut consumers. That is not the main issue here. We aren't advocating for big business over the little guy either. We know the impor- tant role both play in the economy. The debate ultimately comes down to whether or not state government should pro- tect one class of businesses over another. We side with letting the market decide the price of goods and services, rather than state government. n other VoiCes CT should help smokers, not cigarette industry By Dr. Gilbert Ross O n the subject of public health, the Con- necticut legislature is off to a very bad start. New measures have been introduced in both the House and Senate that would severely interfere with smokers' ability to quit their deadly habit. Passing laws that re- define common words, such as tobacco and smoke, is a slippery slope. Using that subter- fuge to torpedo a successful and safe smoking cessation method is the opposite of respon- sible lawmaking, antithetical to public health, and will wipe out many thriving, successful small businesses. The method to which I refer is, of course, the "contro- versial" electronic cigarette and relat- ed vapor products (e-cigs). Why contro- versial? You tell me. Vaping — the com- mon term for using e-cigs — can resem- ble smoking: That's one reason for some to hate the behavior, whatever its bene- fits. Yet, studies have shown that smokers trying to quit have had as good, or bet- ter, results from vap- ing than from all the FDA-approved meth- ods put together. This should not come as a surprise. Vaping reproduces just about everything that a smoker might crave, as opposed to the patches, gums and pills that the FDA says should work but don't (quit rates with these hover in the 10 percent range, unacceptably low). E-cigs supply nicotine in a misty plume of water vapor and glycerin and/or propylene glycol; the nicotine in e-cigs has been shown to be far less addictive than in cigarettes, while the other components of the vapor have been thoroughly studied and are recognized as safe, although long-term studies are still pending. But here's the most important consider- ation, rarely discussed by politicians: Their mission is to help addicted smokers finally escape the clutches of cigarettes. Compared to smoking cigarettes, e-cigs are about 95 percent (or more) less harmful. We surely know the long-term studies of smoking: over one-half of regular smokers will die from their habit, and many more will be chroni- cally sickened. Among the 43 million Ameri- can smokers — three-quarters of whom want to quit — almost a half-million die each year from cigarettes. That is the real problem. Yet politicians and public health offi- cials are targeting — not cigarettes, but e-cigarettes. How did we come to this, where the solution has become the problem? A few of Connecticut's lawmakers have come to believe, or so they say, that the fla- vors of vaping liquids are so "kid-friendly" that the e-cig companies must be marketing them to youngsters. Is that the case, though? Absolutely not. The CDC's own figures show that while youth experimentation with e-cigs has increased over the past few years, the smok- ing rate among teens has declined by levels unseen in years. And the number of kids vaping who were not previously smokers is minuscule. On the other hand, adult vapers prefer flavored liquids three-quarters of the time; indeed, many ex-smokers who switched to vaping have reported (in surveys) that elimi- nating the flavors they enjoy would likely send them back to deadly cigarettes. The attractions that have made vaping the life raft for desperate smokers include flavors; the nicotine hit; and the lower cost. (But wait: hypocritical politicians have become addicted to cigarette tax money, so their next step will be to tax them. But if they tax them at a high enough rate, that too will drive vapers back to smoking). It would be a trag- edy, a travesty of sound lawmaking, if Connecticut deems e-cigarettes to be a "tobacco" product and restricted them accordingly, taxed them, and banned flavors — a lose-lose for public health and for Connecticut busi- nesses, driving the e-cig industry across state lines. E-cigarettes have no tobacco and emit no smoke. There are many common consumer products that have "kid-friendly" flavors, including vodka, energy drinks, and dishwashing cubes — and, ironically, nicotine gum. Why not ban them too? The way to deal with that supposed problem is to enact strict age restrictions, making it illegal to market or sell them to young people. How did fighting America's most important public health problem — cigarette smoking — become so politicized and controversial? If the crusade against e-cigs is successful, the winners would be Big Pharma — sellers of hugely profit- able but almost useless nicotine gum, patches and cessation drugs — and Big Tobacco, eager to keep selling their deadly cigarettes if the e-cig market is stifled by state and federal over-regu- lation and official misleading alarmism. n Dr. Gilbert Ross is the executive director and medical director of the American Council on Science and Health (ACSH), a New York- based consumer education-public health organization. About 5 percent of ACSH's bud- get comes from e-cigarette companies. hartfordBusiness.Com Poll Should CT eliminate its minimum-price liquor laws? ● Yes ● No To vote, go online to HartfordBusiness.com. Last week's poll results: Should CT invest another $100M in its Small Business Express program? 29.3% Yes 14.6% Yes, but a smaller sum 56.1% No Dr. Gilbert Ross Send Us Your Letters The Hartford Business Journal welcomes letters to the editor and guest commentaries for our opinion pages. Electronic submissions are preferred and welcome at: editor@HartfordBusiness.com. Or you may fax submissions to Editor, Hartford Business Journal, at (860) 570-2493. ▶ ▶ How did fighting America's most important public health problem — cigarette smoking — become so politicized and controversial? ▶ ▶ Minimum pricing does little more than increase the cost of alcohol and protect small package stores by ensuring they can keep their prices more competitive with larger retailers.

• Cover