AUGUSTA — Several companies are interested in competing for a new contract to be the exclusive wholesale distributor of liquor in Maine, state officials told the Legislature’s Appropriations Committee on Friday.

The Bureau of Alcoholic Beverages and Lottery Operations is looking for a way to increase the amount of money the state makes while lowering prices for consumers $2 to $7 a bottle and making Maine more competitive with New Hampshire’s state-run liquor stores.

The aim is not to have consumers drink more, but to increase the likelihood that liquor consumed in the state is bought in the state, said Gerry Reid, the bureau’s director, in a brief presentation to lawmakers.

“Our consumers in the state of Maine do not get a good deal, and that’s costing us business,” Reid said.

The goal is not to match New Hampshire’s prices, but to close the gap so consumers will have less incentive to cross the border, he said.

The current wholesale liquor contract, held by Maine Beverage Co., expires in 2014. The state faces a June 2013 deadline for having a new one in place.

Rather than putting out a request for proposals, the state would allow interested parties to put their plans forward and negotiate with each, Sawin Millett, finance and administrative services commissioner, told the committee.

The plan outlined briefly before the committee estimates that Maine could see an additional $25.8 million with different contract terms.

The state has received an approximate average of $30.1 million annually since the existing contract was signed in 2004. That includes a $125 million up-front payment made by the current contract holder early in the term of the agreement.

Millett told the committee that the process would be less formal than the usual request for proposal procedure but would open the door to the same parties. He said an RFP process would take time and carries the possibility of an appeal, which could put the state in an awkward position as it tries to meet its deadline.

The state will have to have an RFP ready by fall in case the negotiated contract process doesn’t yield a favorable deal, Millett said.

The contract would be for operations — warehousing, delivery to agency stores and bottle redemption — and possibly for administration and in-store marketing. There are no plans for the state to get back into the retail end of the business or take back the operations side, Reid said.

He said Maine loses sales of 200,000 to 500,000 cases to New Hampshire annually and could recover half of those losses. New Hampshire aggressively markets itself on television, on radio and in print — not just in New Hampshire, but also in Maine, he noted.

“We would do a degree of that competitiveness to protect our borders and keep the value here,” he said.

Reid said the services the state needs are very specific and there aren’t many parties — perhaps half a dozen — that can perform them. He said the state knows that the current cost of the operation is $7 million annually, so the aim is to meet or beat that number in the new contract.

One person interested in the contract agreed that is a reachable goal.

“It should have been done years ago,” said Ford Reiche, president of a new venture called Dirigo Spirit.

Reiche, who also founded the Auburn-based trucking company Safe Handling, announced his interest in the liquor contract in a letter to state officials in May.

The incumbent, Maine Beverage Co., has expressed interest in the new contract, Reid said, and a lobbyist told him Friday that another party plans to present its credentials soon. A couple of other individuals have said they would like to be notified when the selection process gets under way, he said.

In 2004, the state signed a 10-year agreement with Maine Beverage Co., which featured a $125 million payment that helped the state close a $1.2 billion budget deficit.

The fair market value of the liquor distribution business was pegged at $378 million as of Jan. 1, 2009, according to a study done by Deloitte & Touche.

Neither George Woods, Maine Beverage Co.’s chief financial officer, nor D. Dean Williams, the president and CEO, returned calls seeking comment Friday.


Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.

Kennebec Journal & Morning Sentinel news

Get news and events from your towns in your inbox every Friday.
  • This field is for validation purposes and should be left unchanged.