House To (Potentially) Consider Overturning State Liquor Monopoly

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Absolut Monopoly: Is it worth privatizing hard liquor sales in New Hampshire?

A modified bill that would allow businesses to sell hard liquor has cleared committee and is ready for debate by the full House.  As the Concord Monitor‘s Matt Spolar reports, HB 1251 began as a standard-issue Legalize Private Liquor Sales initiative–which promptly deadlocked the Commerce committee.  So rather than kill the bill, the committee rewrote it to establish “a study committee to research the issue.”

So why does it matter if a bill to study the possibility of allowing grocery stores to sell vodka made it out of committee?  The short answer is, once the bill hits the floor, it’s open to amendments.  And as Spolar explains, the right amendment could create bring the watered-down bill closer to its original form:

“The bill now goes to the full House next month, where an amendment could be offered up to allow some 1,400 locations across the state to sell liquor instead of the 77 state-run stores.”

The bill was introduced by Goffstown Republican Rep. John Hikel.  And Spolar notes that as originally written, HB 1251 could have mixed effects on the state’s revenues and economy.

“A fiscal note attached to the original bill estimated it would increase state spending by $3.6 million over four years to pay for a dozen liquor inspectors who would be needed to handle the new licensing activity. Three years ago, a study by the New Hampshire Grocers Association calculated that opening up liquor sales would bring the state $3.1 million in up-front revenue when stores stocked up, followed by $11 million in annual state revenue.

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Hikel’s original bill would have required the state – which purchases liquor wholesale before selling it – to offer retailers a 10 to 20 percent discount so they could make a profit while keeping prices competitive with the state-run stores. The same discounts are already available to wine sellers.

Hikel’s proposed liquor discount raised concerns about a reduction in state revenue, so he offered to change the bill to require stores to purchase liquor at the state’s retail price.”

Meanwhile, the Grocers Association isn’t pleased with the retail price purchasing requirement, Spolar reports, on the grounds that it will force businesses to charge more than the state stores to turn a profit.

Spolar’s piece also touches on the standard arguments made by the camps opposing and in favor of legalizing private sales.  On the opposition side: It would hurt the state’s revenue and it would make hard liquor more readily available to minors.  On the favoring side: It would end an unfair state monopoly, allow consumers easier-access to a product they want to buy, and stimulate the economy by giving retailers something to sell that’s in-demand.