Topic:
LIQUOR; PRICE CONTROL; RETAIL TRADE;
Location:
LIQUOR; RETAIL TRADE;

OLR Research Report


January 26, 2006

 

2006-R-0064

MINIMUM SELLING PRICES FOR LIQUOR

By: Daniel Duffy, Principal Analyst

You asked if Massachusetts, New York, and Rhode Island have laws setting minimum selling prices for liquor comparable to Connecticut's.

SUMMARY

Connecticut prohibits liquor retailers from selling below cost and defines “cost” to include the bottle price and any shipping or delivery charge actually paid by the retailer, if any. We did not find a comparable law in any of the states surrounding Connecticut. Connecticut also requires manufacturers and wholesalers to file a schedule of suggested consumer resale prices.

We found laws in both Massachusetts and New York that require retailers to conspicuously post a price sign.

CONNECTICUT

Retailers May Not Sell Below Cost

The law prohibits off-premises retailers from selling at a price below their cost. For this purpose, “cost” means the posted bottle price from the wholesaler plus charges for shipping or delivery to the retailer's place of business paid by the retailer (CGS § 30-68m(a)). "Bottle price" means the price per unit of the contents of a case, other than beer, and determined by dividing the case price by the number of units or bottles making up the case and adding at least the following amounts based on the size of the bottle: two cents for bottles one-half pint or two hundred milliliters or less; four cents for bottles more than one-half pint or two hundred milliliters but not more than one pint or five hundred milliliters; and eight cents for bottles larger than one pint or five hundred milliliters (CGS § 30-68m(b)).

Schedule of Suggested Consumer Resale Prices

The law requires manufacturers and wholesalers to file a schedule of suggested consumer resale prices for each brand of alcoholic liquor. The schedule must be filed before the manufacturer or wholesaler sells, offers to sell, solicits an order, or advertises. The law allows sellers to request permission to dispense with this filling requirement for good cause and subject to certain conditions.

The law specifies who must file the schedule: (1) the brand owner if he is licensed by Connecticut, (2) a wholesaler who has been appointed as the exclusive agent by the brand owner for the purpose of filing the schedule if the brand owner is not licensed by Connecticut, or (3) any wholesaler, with the approval of the Department of Consumer Protection (DCP), if the owner has not or is unable to file the schedule or designate an agent for the purpose.

The schedule must be written, duly verified, and filed in the number of copies and in the form required by DCP. It must include: the brand or trade name, capacity of container, nature of contents, age and proof if stated on the label, percentage and type of spirits if stated on the label, the suggested consumer resale price of a bottle, can, case, or fraction of a case. These prices must be uniform throughout the state.

The law requires schedules to be filed and to remain in effect for the periods fixed by DCP, except that these periods may not be longer than four months. Within 10 days after they are filed, the department must make them available for inspection by permittees and the public. Manufacturers and wholesalers must (1) keep copies of the filed schedules on their own premises and (2) give notice of their prices and suggested consumer resale prices to all permit-holding purchasers by direct mail or advertising in a trade publication.

The law explicitly states that off-premises retailers may sell, or offer to sell, solicit an order, or advertise at a price less than the suggested consumer resale price (CGS § 30-64).

MASSACHUSETTS

Posted Price List

Massachusetts requires package stores to post conspicuously an alcoholic beverage price list. Sales must be made at the prices stated on the list (M. G. L. A. c. 138, § 15).

Fair Trade

It authorizes the state Alcoholic Beverages Control Commission to suspend the license of a retailer who violates the state's fair trade law. The fair trade law, which applies to all retailers, prohibits selling items at less than cost with the intent to injure competitors or destroy competition (M. G. L. A. c. 93, §§ 14E to 14K).

NEW YORK

Posted Price List and Item Marking

New York, like Massachusetts, requires package stores to post conspicuously an alcoholic beverage price list. Sales must be made at the prices stated on the list. It also requires retailers to attach a price tag to each bottle or post a price sign next to it (N. Y. Alco. Bev. Cont. Law § 105).

DD: ro