Maine news, sports, weather from Portland Press Herald / Maine Sunday Telegram, Portland, Maine

January 31

LePage rebuffs offer to extend liquor deal

Maine Beverage Co. included a $320 million guarantee, but state officials believe the contract is worth more.

By Michael Shepherd mshepherd@mainetoday.com
State House Bureau

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In a statement issued around the same time as LePage's letter, Ford Reiche, owner of Dirigo Spirit, which also plans to bid on the contract, said Maine Beverage "should not be reluctant to submit (their bid) in an open and competitive bidding process."

Pending legislative approval, the state will seek bids in April or May for the liquor contract, which will be structured without an up-front fee. The state has said it will seek a greater portion of the revenue than it receives now, and will not guarantee a minimum profit margin for the contractor.

Maine Beverage's proposal initially appeared to throw a wrench in the LePage administration's plans for putting the liquor contract out for bid. It came close -- but not close enough -- to the dollar value the governor's team has said it wants.

The LePage administration said earlier this month that the state has made $185 million on liquor sales in the past decade. In 2009, the

financial firm Deloitte & Touche pegged the fair market value of the contract at $378 million.

The last liquor deal has been roundly criticized for taking $125 million in up-front revenue to fill a budget hole that Gov. John Baldacci was facing in 2004. Maine Beverage now gets a guaranteed gross profit of 36.8 percent of annual sales.

On Wednesday, Senate Minority Leader Michael Thibodeau, R-Winterport, described that deal as a "fire sale," and Sen. John Patrick, D-Rumford, a member of the Veterans and Legal Affairs Committee, said he was "hollering and screaming" when the state made the deal.

Thibodeau said that although Maine Beverage made a "serious proposal," the state should continue with a bid process in order to get the best deal.

"I know there are other companies that have expressed an interest in the contract," Thibodeau said. "I think it's important that we have an open and competitive bid process."

Patrick said Maine Beverage has done a good job of managing the state's liquor business, and although he wouldn't have trouble backing Maine Beverage's proposal as written, pending more details, he still wanted the new contract to go out to bid.

After LePage rejected the offer, Patrick said he wasn't surprised.

"I think he may have his mind made up," Patrick said. "I hope he utilizes what was in the letter in the (request for proposal) to encompass what's best for the people of Maine."

State House Bureau Writer Steve Mistler contributed to this report.

Michael Shepherd can be reached at 370-7652 or at:

mshepherd@mainetoday.com

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