December 3 – After months of negotiations, Maine’s Bureau of Alcoholic Beverages and Lottery Operations has reached an agreement to continue contracts with the current liquor distributor for another ten years.
The state’s new contract with Pine State Trading Co., which was signed last week and took effect Sunday, replaces two previous contracts that were extended to allow more time for negotiations, said Sharon Huntley, director of communications for the Department of Administrative and Financial Services. who oversees the agency.
Pine State has overseen trade marketing and administration for the department since the previous contract was awarded in 2014.
After an open request for proposal late last year, Pine State was the only company to submit a bid.
The contract gives the Gardiner-based company exclusive authority to market, sell and distribute spirits to its more than 600 liquor stores in Maine. State law requires that only advertising agency stores can sell liquor, wine and malt liquor for off-site consumption.
Under the new contract, Pine State is entitled to 7.55% of total net sales and additional revenue within the state’s tightly regulated liquor market. That will likely amount to tens of millions of dollars, based on past sales figures.
Over the past ten years, the company has been entitled to 6.95% of total net sales and revenues in Maine: 4.7% for administration, warehousing and distribution, plus 2.25% for trade marketing.
That amounted to more than $16 million in fiscal year 2023, and more than $120 million over the life of the contracts, according to a review of the agency’s annual reports. Huntley later confirmed these figures.
Pine State placed its bids for the 2024-2034 administration and marketing contracts nearly a year ago, during an application period that ended in late January. Weeks later, the contract was tendered, pending final negotiations.
According to the National Alcohol Beverage Control Association, Maine is one of 17 states that controls liquor sales at the state level. New Hampshire and Vermont also use versions of the “control” model.
In Maine, the agency sets spirits prices and organizes sales, meaning operating costs — including payments to contractors — can add to the final cost of bottles.
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