Hartford - The push to end Connecticut's ban on Sunday alcohol sales scored a major victory Tuesday when the most steadfast opponent - the package stores' lobby - reversed its longstanding position.

Carroll Hughes, executive director of the Connecticut Package Stores Association, told a legislative committee that his group will support the Sunday sales part of Gov. Dannel P. Malloy's liquor law overhaul bill. His association had fought vigorously against all prior Sunday sales legislation.

"I've suggested we endorse that," Hughes said at a public hearing before the General Law Committee. "It would seem to be the driving force of the engine on this train to accommodate certain people, mostly in the food stores who are already open [on Sundays] and think that they're going to do a huge business."

Repeal proponents say Connecticut and Indiana are the only states that still outlaw Sunday alcohol sales. Connecticut's modern ban was adopted in 1933 at the end of Prohibition.

So instead of battling for Sundays off, the association instead will focus its opposition on the parts of the bill that would relax price controls and expand the types of stores that can sell alcohol, including a provision to allow beer sales at convenience stores.

Although Malloy recently scaled back the bill to strike compromise, the 900-member package store lobby still feels threatened.

"They basically want us to sell totally below cost at all times," Hughes said.

The governor's proposal also would extend the deadline for Monday through Saturday alcohol sales by one hour, to 10 p.m., and allow restaurants and bars to serve drinks until 2 a.m. every day during the week. Those establishments currently must close by 1 a.m. on weeknights and 2 a.m. on Friday and Saturday evenings.

If the General Assembly were to approve Malloy's bill in its current form, Hughes said, many small mom-and-pop package stores would lose sales to big stores and be forced to close. Nearly 8,000 package store jobs would be lost, he said.

But the governor insists that his proposals actually would create jobs and new business for the state's retailers, who would recapture the customers now driving across state borders to buy less expensive liquor or liquor that is available seven days a week. He called the current minimum pricing system "ghastly" and "unfair" to state residents.

"This has been a 100 percent regulated and protected industry and, in so many ways, quite un-American," Malloy said. "I go into a pharmacy and there's no minimum price for aspirin, there's no minimum price for NyQuil."

Malloy also told reporters that among all the states, Connecticut ranks 49th in per-capita purchases of alcohol. He said the state should be ranked much higher.

"What that's telling us is we're losing large amounts of sales to New York, Rhode Island and Massachusetts," he said.

The governor cited one industry estimate that $570 million a year in alcohol sales revenue is lost to other states.

Large numbers of supporters and opponents of the liquor legislation descended on the Capitol for Tuesday's hearing. An estimated 350 people gathered around the north steps of the statehouse to cheer the bill forward at a rally organized by End Connecticut's Blue Laws Coalition, a business and labor-backed group.

Meanwhile, a hundred or so opponents of the governor's bill gathered in the atrium of the Legislative Office Building. Many were package store owners.

Among those testifying Tuesday was East Lyme First Selectman Paul Formica, who urged lawmakers to pass a separate measure that would end the restriction on first selectmen holding alcohol permits.

He told the committee how he and his wife, Donna, started Flanders Fish Market in East Lyme in 1983. The corporation that owns the business was in her name. But when she died two years ago of a heart attack, he became the executor of her estate.

"If we don't make a change in this law, he's going to be faced with a really impossible decision: whether he continues to be a part of that business, or he continues to serve as first selectman," said state Rep. Ed Jutila, D-East Lyme, a bill co-sponsor.

Committee members appeared sympathetic to Formica's predicament.

Later in the hearing, Charles Bowe, whose family owns the Grand Wine and Spirits liquor stores in Groton, presented his petition with 7,000 customer signatures against the governor's comprehensive liquor legislation.

"If you let this happen, the big stores are going to have an extreme advantage," he said.

Bowe suggested that if the state really wants to increase competition in liquor sales, it should consider ending the regional exclusivity rules that are enjoyed by beer, wine and spirits wholesale distributors. "If we don't have the ability to shop for the best price, it will be difficult to be competitive in the arena you're looking to change," he said.

State Sen. Edith Prague, D-Columbia, said she is against every part of the governor's alcohol laws bill, including Sunday sales. The package store owners in her district tell her they are all opposed.

"These folks would like one day off to spend with their family," Prague said.

The senator also said she was disturbed by the prospect of convenience stores selling beer. This could lead to more drunken driving and underage drinking, she said.

The committee did not vote on any of the liquor bills Tuesday.

j.reindl@theday.com