HALLOWELL — The LePage administration is asking Maine’s liquor commission to end sales of miniature “nips” bottles, a move that could cost the state tens of millions of dollars in revenues and affect jobs at a Lewiston distillery.

LePage originally opposed a 5-cent deposit on nips on grounds that it would hurt businesses and state finances, but then threatened to remove the increasingly popular 50-milliliter liquor bottles from store shelves amid a dispute with lawmakers over litter and Maine’s “bottle bill.”

On Tuesday, the administration made good on the governor’s vow when officials with the Bureau of Alcoholic Beverages and Lottery Operations formally began the process of trying to remove, or “delist,” nips in Maine.

“The bureau intends to recommend at the next (State Liquor and Lottery) Commission meeting on July 11 that all 50-milliliter spirits products be delisted,” bureau Director Gregory Mineo told members of the liquor commission.

Lawmakers recently overrode a LePage veto of the bill, L.D. 56, which requires retailers to collect a nickel deposit on every 50-milliliter bottle beginning in 2019 as a way to encourage recycling. Sales of nips have soared in recent years, but so has roadside litter. Bill supporters argued that adding nips to Maine’s well-established “bottle bill” will help address the roadside litter problem, but LePage now argues that the deposit will not address the underlying issue of individuals drinking while behind the wheel.

‘MISGUIDED’ THREAT TO LEWISTON JOBS

One member of the Lewiston area’s delegation to the Legislature criticized the LePage administration effort to end nips sales.

“The governor’s attempt to ban the sale of 50-millileter bottles of spirits is misguided in the extreme,” Assistant Senate Minority Leader Sen. Nate Libby, D-Lewiston, said in a written statement. “There are more than 100 jobs in Lewiston tied to the sale of so-called ‘nips,’ and I will oppose, to the greatest extent of my ability, any move by the government that could put my constituents out of work.

“No man or woman in Lewiston should lose their livelihood in service of Gov. LePage’s petty vendetta against the Legislature.”

LePage’s office did not immediately reply to a request for comment Tuesday.

The five-member State Liquor and Lottery Commission will accept written comments on the delisting proposal through July 3 and will hear public feedback during its July 11 meeting in Augusta. If approved, the proposal would cut out a segment of the liquor business that accounted for 6.6 percent of the beverages and lottery bureau’s profits from spirits during the past year, but has been growing by as much as 40 percent annually as consumers’ tastes and buying preferences change.

The bureau estimated Tuesday that incorporating nips into the bottle-deposit bill would cost more than $3.2 million in new equipment, staffing and redemption center handling costs through June 30, 2020. But that estimate is well short of the profits the state appears poised to reap from nips sales in the coming years.

During the 52-week period that ended May 27, Maine agency liquor stories sold 9.8 million nips bottles, earning the state nearly $4.1 million in profit. That profit figure represents a 44 percent increase over the previous year, according to data supplied by the bureau to liquor commission members.

STATE RISKS LOSING ESTIMATED $150 MILLION

The manufacturer of Maine’s most popular brand of nips, Fireball Cinnamon Whiskey, estimated that Maine could lose up to $150 million in profits over the next 13 years just from its products. Sales of Fireball, which is produced by Sazerac Co., accounted for 4.2 million of the 9.8 million nips sold in the past year and saw more than 90 percent growth year-over-year, according to beverages bureau data.

Sazerac, which employs 130 people at a bottling and finishing plant in Lewiston, supplied four of the top 10 best-selling nips brands in Maine. And in a mid-May letter sent to a legislative leader, Sazerac CEO Mark Brown warned that ending sales of nips in Maine would have a “drastic impact on our company and our employees.”

Sazerac officials worked with lawmakers on a compromise to reduce the proposed bottle deposit from 15 cents – which is the deposit applied to all other wine and liquor bottles in Maine – to 5 cents included in the final version of the bill. Lawmakers also delayed the implementation date to 2019 in order to give manufacturers and the state’s liquor contractor, Pine State Spirits, additional time to adapt.

“Under that compromise, we concluded that we could incorporate the 5-cent deposit into our costs without passing it on to the consumer and without negatively impacting any of the 130 jobs in Lewiston,” Brown wrote to Senate President Mike Thibodeau, R-Winterport. “Unfortunately, the situation in Augusta has changed and it has caused us to re-evaluate our position.”

Brown wrote at the time that delisting nips “would be detrimental to the state’s finances, as this is one of the fastest-growing sectors in Maine.”

Brown could not be re ached for comment Tuesday. But during the liquor commission meeting, a Sazerac representative said the bureau’s $3.2 million cost estimates “would be reduced significantly” if Sazerac voluntarily provided the 5-cent deposit stickers or changed the bottle labels rather than pass those costs onto Pine State Spirits or the bureau. Mineo, the bureau director, said the agency “would look forward to hearing that, and that would be something that we would certainly have to factor in” to any decision.

Kevin Miller can be contacted at 791-6312 or at:

kmiller@mainetoday.com

Twitter: KevinMillerPPH

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