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Liquor madness

Booze restores Maine's financial liquidity
By AL DIAMON  |  December 16, 2009

Raise your glasses and toast the financial genius who — without increasing taxes, cutting services or employing accounting gimmicks — solved Maine's budget crisis.

Me.

I humbly thank you. Allow me to offer refills, so you can toast me again. Don't worry about the cost. After all, it was by getting the liquor flowing that I restored the state's general fund to liquidity.

It was simple, really. I discovered that Maine had been running its alcoholic-beverage operations about as effectively as Tiger Woods managed his social life. The state was practically begging neighboring New Hampshire to steal our booze business, and the Granite State was obliging. In the last fiscal year, New Hampshire turned a profit on its state-run liquor stores of more than $120 million. Their hooch honchos estimated that half that cash came from out-of-staters, with Maine accounting for almost $20 million, according to a knowledgeable industry source.

That's just the profit we lost. The total sales were much greater.

No wonder. Maine's wholesale and retail prices were being set by brainless bureaucrats, who apparently missed economics class the day they took up the concept of competition. Nobody ever explained to them that if consumers can buy the same thing cheaper elsewhere, they will.

And there was no question New Hampshire was selling liquor for a lot less than Maine. I randomly selected 20 products from this state's December list of alcoholic-beverages specials and comparison shopped for the same bottles in Portsmouth.

The result: Only one item was a better deal in Maine. In two cases, New Hampshire's regular price was the same as Maine's sale price. But in 17 instances (that's 85 percent), New Hampshire was the winner. From high-end cognacs to low-rent coffee brandies, the savings were significant. The average difference on my 20 items came to over three bucks a bottle.

Remember, that's comparing our sale prices to their regular prices. No wonder millions of our hard-earned dollars went south.

To add insult to injury, New Hampshire was also the place to buy Maine's liquor of choice: Allen's Coffee Brandy. Allen's is the largest selling brand in this state's booze outlets, but it was a much better deal across the border. A 750-milliliter bottle of the stuff went for $10.99 here (that's the non-sale price) and $7.49 there. The 1.75-liter size was an even bigger bargain. In Maine, it was $19.99; in New Hampshire, just $15.99.

There were, of course, still some reasons to buy liquor here at home. Desperation, for instance. When you ran dry on a Saturday night, you paid whatever it took to save the weekend. There was also the issue of legality. It was against the law to bring more than one bottle back from New Hampshire. By my calculations, roughly 10 percent of this state's residents were obeying that statute. Mostly people who didn't drink.

Here's how I managed to recoup all that lost revenue and save the state. I went to see officials at Maine Beverage Co., the entity that in 2004 was granted a 10-year monopoly on the state's wholesale liquor business for a fraction of the money Maine would have made if it had hung onto it. I got its executives drunk ("Have some more Chivas Regal. Can you believe it's $4 a bottle cheaper in New Hampshire?") and convinced them to end the deal early.

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