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Battle Brewing Over Maine Liquor Sales Contract
01/30/2013   Reported By: A.J. Higgins

The expiration of Maine's liquor sales contract is more than a year away, but signs of a pitched battle for those contract rights are already on the horizon. The current contract holder has notified Gov. Paul LePage and legislative leaders that he's ready to continue those services - even though a formal request for proposals for a new contract has yet to be posted by the state. As A.J. Higgins reports, Maine Beverage says it can guarantee $32 million a year in liquor revenue to the state.

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Battle Brewing Over Maine Liquor Sales Contract
Originally Aired: 1/30/2013 5:30 PM

Maine Beverage Company has held the wholesale liquor sales and distribution contract in the state for the last decade, and its contract will expire next year. Although state officials said they would seek a formal request for proposals for bidders on a new 10-year contract this year, that RFP has not gone out.

That didn't discourage Dean Williams, the president and CEO of Maine Beverage, from making an offer that he says has previously been permitted under two earlier agreements with the Legislature.

"Our intention with this letter here was to let the state know that we're a very interested partner in continuing the business with them," Williams says.

In his letter to Gov. Paul LePage, Williams said he appreciated the governor's plan to repay nearly a half-billion dollars in outstanding state Medicaid debt to Maine's hospitals by taking out a revenue bond to cover Maine's share of the bill. LePage would then repay the bond through state's liquor sales.

Williams says he could guarantee annual state liquor revenues of $32 million, with the potential for an additional $4 to $6 million annually, depending on agreements with the state. He also suggested that if LePage were to adopt the bond proposal, Maine Beverage would be open to including an up-front cash payment to assist with the hospital repayment plan.

Williams declined to elaborate on whether he would be open to lowering the price of alcohol in all of Maine, or just along its western borders with New Hamphire, where prices are cheaper.

"To get into too many of the details probably wouldn't be fair to either side," Williams says. "I mean, it's a letter that says we value our relationship, we want to continue our relationship. We understand that the business has grown significantly, and we understand that it's going to cost a lot more money for us to continue our relationship."

But there are other parties that would like to see the state sever its relationship with Maine Beverage. Ford Reiche represents the Dirigo Spirit Co. in Lewiston that hopes to land the state's next wholesale liquor contract. He says Maine can get a better deal than what Williams is offering.

"They're offering $32 million a year guaranteed, plus $4 to $6 million in public funds," Reiche said. "If you call that $38 million they're offering the state, the liquor commissioner, Gerry Reid from BABLO, made a presentation just two days ago to a legislislative committee  that oversees this and he says there's over $50 million available just using 2011 numbers. So why the state would seek such a small amount from Maine Beverage is beyond me. This is not at all a generous offer."

"Do they have an inside track? Of course," says Maine Senate President Justin Alfond.  Alfond says Maine Beverage has made a good faith effort. But he also says the next contract will be awarded based on the best revenue returns to Maine and the ability of the bidder to deliver the goods.

"The way that I think we're all looking at it is that everyone is on an equal playing field going forward, because this time around we know as a state a lot more than we did 10 years ago," Alfond says.

The governor's office confirmed that it did receive Maine Beverage's offer, and declined further comment. 


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