HALLOWELL — Despite the objections of three suppliers, the Maine liquor commission agreed Tuesday to raise the price on 778 products sold in state-sanctioned agency liquor stores, including the small but popular “nips.”

The 3-2 vote means the price of most 50-milliliter nips bottles will go from 99 cents to $1.49 starting Oct. 1.

Gregg Mineo, director of the Bureau of Alcoholic Beverages and Lottery Operations, said after a nearly eight-month study, the price increases, which mainly affect the lowest-priced “value brands,” was necessary to ensure the state’s profit margins keep pace with increasing sales.

Mineo said liquor sales in Maine have increased as a result of more aggressive marketing and pricing and in large part because of an enormous expansion in the number of retail outlets. However, state profits have not kept pace with sales growth.

In 2015, the state sold about $155.5 million worth of alcohol and earned a profit of about $46.1 million. For the fiscal year that just ended, sales grew to $176.7 million but the state’s profit was only $47.7 million, Mineo said.

Among the suppliers objecting to the price hike was the Sazerac Co., which employs about 100 workers at a Lewiston plant that bottles many of the brands on which prices were raised – including the top-selling brand of nips, Fireball Cinnamon Whiskey.

In addition to the nips price increases, other products will see prices go up between 20 cents and $1 a bottle. The markups are a scaled-back version of an earlier proposal that would have increased the price on some brands and sizes by as much as $6 a bottle.

Gerry Reid, a former beverages and lottery bureau director and now an executive with Sazerac, told the commission that the price increases were discriminatory not only against his company, but also against lower-income Mainers who are consumers of the value brands the state is marking up to make a larger profit.

“It is flagrantly discriminatory against people who are the least able to pay,” Reid said. He urged the commission to table its decision and instead consider an across-the-board price increase for all brands. He noted that 50-to-60 percent of the beverages now facing a price increase were Sazerac products.

The pricing adjustments come in the wake of a debate between Gov. Paul LePage and the Legislature over adding a 5-cent bottle deposit on nips bottles to discourage roadside littering. After lawmakers overturned a LePage veto of a bill that established the deposit, Mineo, a LePage appointee, asked the commission to ban the sale of nips. The commission rejected that proposal in July.

Sazerac said the decision to increase prices was “retaliatory” against the company because it reached a deal with the Legislature on the bottle deposit change.

Mineo rejected that assertion.

“Why would we want to retaliate against a supplier?” he asked. “It makes no sense. I’ll leave before I do something like that, and no one’s told me to do that. It’s just ridiculous.”

Scott Thistle can be contacted at 791-6330 or at:

sthistle@pressherald.com

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