Sunday, April 20, 2014
Pine State Trading Co., the Gardiner-based company that distributes liquor to retailers throughout Maine, also will handle marketing for the state-run liquor business, officials said Friday.
The state Bureau of Alcoholic Beverages and Lottery Operations said it awarded Pine State the 10-year marketing contract after evaluating proposals from three interested candidates. The other two companies vying for the contract were CD&M Communications of Portland and Dirigo Spirit Co. of Cumberland.
The bureau announced in January that it had awarded Pine State a 10-year contract for spirits administration, which includes warehousing and distribution.
The family-owned company, which has 900 employees, including 100 who are involved in the liquor operation, was the winning bidder a decade ago for the state’s existing 10-year liquor warehousing and distribution contract.
Bureau spokeswoman Jennifer Smith said the marketing contract is a first for the state. Previously, state liquor license holder Maine Beverage Co. and state employees each did a small amount of marketing for liquor products sold in Maine, such as in-store advertising displays, she said.
While the state does not disclose actual proposals submitted by contract-seekers, it did release an evaluation summary for the marketing proposals showing that Pine State beat or tied the other two companies in every category, including “business plan and presentation,” “financial incentives” and “revenue maximization.”
“Pine State Trading Company received the review team’s highest ranking,” bureau Deputy Director Timothy Poulin said in a letter sent Friday to Pine State executives. “The Bureau will be contacting the aforementioned bidder soon to negotiate a contract.”
Out of a total 1,100 points possible on the evaluation form, Pine State received 1,063 points. Dirigo Spirit received 1,010 points and CD&M received 536 points.
Bureau of Alcoholic Beverages and Lottery Operations Director Gerry Reid said in a written statement that the Pine State proposals for both distribution and marketing exceeded the state’s expectations for potential return on investment.
“I am pleased to report that the contract for warehousing and the contract for marketing will meet or exceed the benefits we estimated would flow from the (bidding) process,” Reid said. “This is an extremely positive outcome for the state.”
Gov. Paul LePage touted the state’s new liquor contracts in a news release and pointed out that state revenue from liquor sales over the coming decade is expected to far exceed what it has been during the past 10 years.
“I’m pleased to see my administration’s strategic vision for new spirits agreements come to completion,” Le- Page said. “In the year since we announced our plan, we have secured a revenue bond, repaid Maine’s hospitals and reached agreements that will allow the State of Maine to take back the significant revenue created by the spirits business. I am proud of the positive impact these agreements will have on the state over the next 10 years.”
In September, LePage fulfilled his pledge to repay nearly $490 million in past-due MaineCare subsidies to hospitals in the state.
Maine’s portion of that debt, $183.5 million, was paid for with a revenue bond that pledged revenue from the state’s liquor business as its collateral. The federal government paid the remaining portion of debt owed for Maine- Care, the state’s name for Medicaid.
Based on modest sales forecasts, the state’s share of liquor sales is expected to yield at least $450 million in wholesale revenue over 10 years, more than double the amount the state received under the current agreement with Maine Beverage Co., the news release said.
J. Craig Anderson can be contacted at 207-791-6390 or: