Reselling Illegal NH Booze Hurts Maine’s Bottom Line

Stuart Webster / Flickr

NH's liquor sales are dinging Maine's revenues

One of the signatures of New Hampshire’s Liquor Commission is its determination to compete with other states by offering low-price and sales-tax-free booze in convenient border locations.  And revenue reports bear out this approach. Most often, we hear about heavy cross-border traffic from Massachusetts–after all, there’s a good reason why so many of the top-selling state liquor stores are easy commutes from the Bay State (complete with their own exits off the interstate).

But apparently, New Hampshire’s cut-throat sales tactics are hurting our neighbor to the north, as well.  Susan M. Cover of the Portland Press-Herald reports:

“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…

Gerry Reid, director of the Maine Bureau of Alcoholic Beverages and Lottery Operations, said Maine loses an estimated 206,000 to 584,000 cases of liquor sales each year to New Hampshire, which sells liquor at lower prices and without sales taxes.”

Later, Cover writes:

“Although consumers are allowed to buy small quantities of liquor in New Hampshire for personal use, it’s illegal to buy multiple cases and bring them back into Maine, said Reid.

While the solution may include hiring a few more enforcement officers, he said, the real problem is price. When liquor costs $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.'”

Ultimately, Reid would like to lower liquor prices to make Maine more competitive with New Hampshire.

This issue is coming up because in a year, Cover writes, Maine could very well be under the gun.  In the summer of 2013, the state’s projecting a $20 million budget gap.  Under its liquor distribution contract with Maine Beverage Company, the state brings in $23 million a year, before sales taxes.  So getting a better contract–and competing more aggressively with New Hampshire on liquor sales–would be a pretty straight-forward way to fill some of that hole.

As for Granite State revenues, in his letter introducing the New Hampshire Liquor Commission’s FY 2011 report, Chairman Joseph Mollica wrote:

“…this 2011 fiscal year was another record-breaking year for the New Hampshire Liquor Commission. Total sales increased approximately $23.24 million and profits were up $4.8 million from fiscal year 2010…

Our revenues comprise 23% of total statewide revenues…”

According to the report, total net revenue for FY 2011 (including various non-sales liquor taxes and grants) was $138.1 million.