AUGUSTA — Maine bar owners and others who buy large volumes of liquor in New Hampshire and resell it in Maine are costing the state $4 million to $11 million a year, the head of the state’s liquor bureau said Monday.
Gerry Reid, director of the Maine Bureau of Alcoholic Beverages and Lottery Operations, said Maine loses an estimated 206,000 to 584,000 cases of liquor sales each year to New Hampshire, which sells liquor at lower prices and without sales taxes.
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“That number is kind of a startling number,” Reid told members of the Legislature’s Veterans and Legal Affairs Committee. “If we could recover the value, it’s huge.”
The issue came up during a briefing on the state’s effort to negotiate a new 10-year contract for liquor distribution.
Maine is one of 19 states that regulate alcohol by controlling products and prices. In 2004, the state sold off the distribution part of the business to Maine Beverage Co., which handles the warehousing and delivery of distilled spirits and fortified wines, according to the bureau’s website.
After getting an initial payment of $125 million, the state is receiving annual payments.
Now, the state is getting ready to ask for new bids on the contract. Reid said the contract doesn’t have to be in effect until July 2014, but a $20 million hole is projected in the state budget that starts in July 2013, so the state needs a contract a year early.
The current contract generates nearly $23 million a year for the state, not including the sales tax. Reid told lawmakers that he will “pursue a significant increase” in the price of the contract.
He also wants to try to lower liquor prices and work to better promote liquor sales in Maine.
Although consumers are allowed to buy small quantities of liquor in New Hampshire for personal use, it’s illegal to buy multiple cases and bring them back into Maine, said Reid.
While the solution may include hiring a few more enforcement officers, he said, the real problem is price. When liquor costs $2 to $7 more per bottle in Maine than in New Hampshire, consumers are acting rationally by crossing the border, he said.
“Every single one is higher priced in Maine,” he said. “There are no exceptions.”
Democrats on the committee criticized the Baldacci administration for not negotiating a better contract with the distributor in 2004, and for negotiating without legislators’ input.
“I’m hoping we get a heck of a better deal than the Baldacci administration (negotiated),” said Sen. John Patrick, D-Rumford.
When it comes to increasing enforcement, Reid said it wouldn’t take much to make a difference — and increase the state’s bottom line.
“A couple (of officers) with a lot of publicity around their activities would have a positive effect for the state of Maine,” he said.
State House Writer Susan Cover can be contacted at 620-7015 or at: scover@mainetoday.com
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