April 02, 2020

Lawmakers consider future of liquor sales > Prices, privatization among issues

AUGUSTA — The King administration came out swinging Tuesday against a bill that would effectively allow agency liquor stores to set their own prices.

The legislation was one of four liquor industry-related bills reviewed by the Legislature’s Legal and Veterans Affairs Committee, which will reconvene at 1 p.m. on Jan. 29. That session will produce the first of a series of workshops aimed at initiating changes in the way Maine residents purchase liquor.

Gov. Angus S. King repeatedly has stated his goals of getting the state out of the liquor business. Two of the major impediments to reaching that end involve the 106 current employees working in state-run liquor stores and 183 retailers licensed as agency stores in Maine.

Representatives of both groups were out in force Tuesday to protect their jobs and licenses as lawmakers not only considered repealing price limitations for agency stores but also heard bills that would:

Remove the state from the liquor business entirely by repealing all agency store licenses and assessing a $3.50 per gallon flat tax on all spirits in addition to premium and sales taxes.

Replace the State Liquor Commission with the Bureau of Alcoholic Beverages and Lottery Operations and establish an Alcoholic Beverages Advisory Board that would include three state liquor store employees among its 10 members.

Eliminate the possibility of establishing liquor stores along the Maine Turnpike.

Eben B. Marsh, director of the Bureau of Alcoholic Beverages and Lottery Operations, was particularly critical of LD 1932, “An Act to Promote Competition in the State’s Liquor Industry.” The measure would repeal a section of law passed by the Legislature during last-minute revisions to the state budget that implemented a new pricing strategy designed to increase profits for agents without increasing the disparity in liquor prices between Maine and New Hampshire.

Marsh termed the bill’s title “spurious and virtuous,” adding it was a “misperception” to imply there can be competitive free enterprise with a limited number of agents within exclusive territories.

“Letting agents set their own retail prices in this environment in no way promotes competition, as there is no market-driven enterprise,” Marsh said. “I feel we have to ask ourselves why a person in Pembroke should not pay the same price as a person in Brunswick.”

Maine is one of 18 “control” states that set government up as a mechanism to regulate the sale of alcohol after the repeal of Prohibition. Marsh said the means of monitoring retail sales vary from state to state, but that in all cases designated retailers are licensed by the state to act on behalf of the state for point-of-sale spirits.

It’s a system Marsh said is working well and should not be overhauled to accommodate the first suggestion for revision that comes along. The state derived a little more than $22 million from liquor sales last year and the King administration would not be excited about adopting a plan some fear would be overly bold.

“Our budget could not support an across-the-board increase without some incentive to build the value of sales,” Marsh said. “Allowing the agents to set retail prices would serve to compound an already gloomy sales picture.”

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