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.
Although individual consumers are allowed to buy a small quantity of liquor in New Hampshire for personal use, it’s illegal to buy multiple cases and bring them back into Maine, said Gerry Reid, director of the Maine Bureau of Alcoholic Beverages and Lottery Operations.
It’s estimated that Maine loses 206,000 to 584,000 cases of liquor sales to New Hampshire each year, Reid said.
“That number is kind of a startling number,” he told members of the Legislature’s Veterans and Legal Affairs Committee. “If we could recover the value, it’s huge.”
While part of the solution may be hiring a few more enforcement officers, he said the real problem is price. When bottles of liquor cost $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.”
For individual consumers, it is legal to purchase roughly two 1.75 milliliter bottles or five one-fifth bottles in New Hampshire for consumption in Maine.
The topic of liquor prices and cross-border sales came up during a briefing on the state’s effort to re-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 lump-sum payment of $125 million, the state receives annual supplemental payments.
Now the state is getting ready to ask for new bids on the contract. Reid said although it does not have to be in place until July 2014, there’s a $20 million hole in the 2013 budget, so the state needs to get a contract in place 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’ll “pursue a significant increase” in the amount of the contract. He also wants to try to lower prices and work to better promote liquor sales in Maine.
Democrats on the committee criticized the Baldacci administration for not negotiating a better contract in 2004 and for conducting negotiations without legislative 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 won’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.
Susan Cover — 620-7015
scover@mainetoday.com
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