Thursday, December 5, 2013
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Liquor on display at Downeast Beverage on Commercial St. in Portland.
The state's 10-year contract with Maine Beverage Co. expires in 2014. In what has been described in hindsight as a bad deal for the state, the company paid $125 million up front for the contract, then split revenue with the state 50-50 over a set ceiling, which will add about $65 million over the course of the contract.
Maine Beverage Co. President D. Dean Williams said he is watching the latest debate with interest.
"The state needs to decide if it wants to take the business back or keep it in private hands," Williams said. "We feel like there is a huge benefit to keeping it private."
LePage recently rejected Maine Beverage Co.'s offer to pay a guaranteed $320 million to extend its contract without a bid process. LePage said he thinks the contract is worth more.
From mid-2004 through 2011, liquor sales totaled $864.7 million, according to financial documents filed with the state.
Williams said a lot goes into managing Maine's liquor business.
"The problem with being a good operator is that people don't think you do much. So for nine years this thing has just ticked and ticked and we've grown it, and now everyone thinks, 'This is easy, let's just take it back and get the profit,'" Williams said.
He said he likes Goodall's proposal, particularly the big upfront $200 million payment.
When asked if his company would bid for any of the work under LePage's scenario, Williams said: "As Maine Beverage Company? Probably not."
Goodall said the governor should provide more detail on his plan.
"The state hasn't proven they have the expertise," he said. "The governor and his staff need to clearly outline what will be the total cost (of their proposal) and their exact plan on how they plan to administer the contract."
LePage has said his plan would allow the state to collect more money from liquor sales and lower retail prices by $2 to $7 per bottle to make Maine more competitive with New Hampshire. The state also has said it wants to pay higher commissions to agency liquor stores.
Dirigo Spirit, a company founded last year to bid on the contract, could be leaner and more efficient than Maine Beverage Co., said its president, Ford Reiche of Auburn.
"State Finance Commissioner Sawin Millet and the State Liquor Bureau have been publicly working toward a fair and open selection process for more than a year without objections from any stakeholders except the incumbent, Maine Beverage Company," Reiche said in an email Thursday. "This new legislative proposal is just another thinly veiled attempt to undermine that process. Maine taxpayers won't be well served by repeating the 2004 political process that brought Maine Beverage Company to our state."
Noel K. Gallagher can be contacted at 791-6387 or at:
This story was corrected at 10:55 a.m. February 22, 2013 to correct an error in the subheadline, which had misidentified Senator Seth Goodall as a State Representative.