By Jerry Farrell, Jr.
There is no question that almost everyone on Planet Earth would like to consign the year 2020 to the history books and firmly close the door behind it. A horrible pandemic, a tumultuous presidential election and social unrest were some of the things that we experienced during 2020. But 2020 was also the year of a federal census.
We mostly forget that censuses have consequences; they often trigger the reconfiguring of political subdivisions and a cascade of resulting changes. A past census caused the loss of a U.S. Congressional district in Connecticut. Within the liquor industry in Connecticut, the census numbers will also cause some changes to the number of package store permits available, and current package store permittees need to be knowledgeable about possible consequences.
The state statutes concerning package stores provide that a town shall have one package store per 2,500 residents. The statute provides that the federal census shall be the measuring stick by which this will be counted. So to that end, every 10 years, once the census has been undertaken and the town-by-town population numbers released, the state Liquor Control Division will revise its numbers as to how many package stores are allowed per town.
Three different scenarios could occur from the revised town-by-town population numbers resulting from the 2020 census.
First and foremost will be the “status quo” towns, where the population has not shifted in number and therefore the number of package stores allowed in that town will not change because of the census.
Secondly will be those towns that have gained in population. Have they gained enough population over the last 10 years – 2,500 more people – for additional package store permits to be calculated and allowed?
Thirdly will be those towns that have lost population over the last 10 years. Have they lost enough population over those 10 years – 2,500 fewer people – to impact the total number of allowable permits for that town?
Keep in mind that some towns are already “over permit.” By “over permit,” we mean that there are already more existing, active package store licenses in that particular town than the “allowed” number calls for. While Liquor Control will not go out and cancel permits to rectify the “over permit” situation, it will more closely scrutinize the details when something of substance occurs with a store in one of those communities – such as a change in ownership or the removal of the store to a new location.
A package store license is a valuable thing, and an owner in one of these “over permit” communities will want to tread very carefully to not cause the elimination of a license that, once extinguished, cannot be restored.
Once the dust from the 2020 census has settled, it is possible that additional communities will end up being over permit. On the one hand, one can argue that this makes the license more valuable as a result. On the other hand, it places the licensee in a position where a transfer of ownership can be somewhat more difficult. Given the peculiar and special nature of liquor licenses, there is no question that it is worth getting good legal advice before taking any action that would affect the viability of the license.
Anyone interested in the future of Connecticut will be interested to find out how our population has changed, where population has increased and where it has decreased. Those of us who deal with liquor licenses on a daily basis will be interested to see those same numbers and what changes they may cause to the liquor trade.
Jerry Farrell Jr. served as chairman of the Connecticut Liquor Control Commission from 2006 to 2011. Today, he is an attorney in private practice, focusing on liquor licensing law. He can be reached at firstname.lastname@example.org. This column is not intended to be legal advice; consult an attorney for answers to your specific questions and situation.