Maine and Liquor: How leasing out Maine’s liquor distribution has helped

Distilling in Maine, the illegal way.

Distilling in Maine, the illegal way.

Governor Paul LePage has stated that he wants to pay down the State’s debt to Maine hospitals by using the proceeds from liquor sales. The hospitals are owed $186 million.

Once again, the spotlight will be on the sales of alcoholic beverages down east and – to a lesser degree – what we’re doing to contain its harmful effects.

The Pine Tree State’s experiences with the “Demon Rum” goes back a long way. How many Mainers know that we were the first State in the Union to institute a prohibition law [done in 1856]? Neal Dow is a name most Maine people have forgotten, but this former Portland fire fighter, State Representative and Civil War general was the spark plug that ignited the State and eventually the entire nation and world to ban all alcohol consumption [including beer and wine]. The legislation Dow pushed was from then on, all over the country, was known as “the Maine Law.

How effective it was, even in Maine, has been a matter of controversy. In Portland, Lewiston and Bangor, our biggest cities, you could certainly get a drink and probably this was the case in all other venues. Officially, then, Maine was “dry” and a model for the rest of the country when national Prohibition was voted in.

Proximity to Canada showed itself particularly during those years of national Prohibition. If you had money, you could easily buy the booze that was being smuggled from our “wet” northern neighbor.

Fifty years ago, I migrated to our State. Unlike my home State of Massachusetts, all sales and distribution here was handled by Maine through its own liquor stores – the “little green monsters” (from their interior color) where a clerk would take your order and bring you what you wanted. As if the shadow of Neal Dow hung over them, they were not designed to be customer friendly.

Frequently, moves were made to privatize the liquor business. The counter argument that shot them down was that State control was the only way to prevent minors from obtaining booze.

Even under this latter arrangement, controversy existed. A running problem was what to do about Mainers who bought their liquor elsewhere, notably New Hampshire, where prices were lower. The loss of revenue was significant.

Through the efforts of a State Representative from Kittery, a bill was passed in Augusta that attempted to deal with the New Hampshire problem. It allowed one store on the border to sell at the same price as in New Hampshire. Before long, it was doing ten percent of all Maine liquor business and making an impact on the outflow of revenue.

Prior to that, technically, it was against the law for Maine citizens to bring in more than one bottle of liquor from out of State. James Erwin, a resident of York, had become Maine’s Attorney-General and he vowed to enforce the current law. He had one woman arrested for importing more than was allowed by the existing statute but the case was thrown out of court.

Thus, one of the arguments for the cut-rate store was that it would keep Mainers from crossing the border, which it most certainly did.

Yet this cut-rate store was always resented by people in other parts of Maine. Year after year, legislation was introduced to do away with it. If they couldn’t get the same discount, why should anyone in Maine be allowed to have it. The answer was that if you closed the Kittery store, people would just go back to New Hampshire and get their discount. Some folks felt so strongly that, out of spite, they would buy their liquor in New Hampshire rather than patronize the Kittery store.

The issue became moot in 2004 when Maine’s governor made a deal with a private entity, the Maine Beverage Company, to handle all liquor distribution to the State’s 364 Agency stores. Essentially, this did privatize our State liquor industry.

Nowadays, most of the liquor bought in our section of the State is done in New Hampshire.

One bit of relevant history that few people, I’m sure, will remember was the passage of the Alcohol Premium Bill, which put a very small tax on every bit of liquor sold in Maine. The money was dedicated to dealing with the problem of alcoholism. Very few efforts were being made until then to face those harmful effects and their costs to all of us. Not surprisingly, alcoholism has been called the number one drug problem in Maine.

I have to wonder if money from the Alcohol Premium fund is still going to help deal with the problems that alcohol consumption causes. We now hear from Governor Le Page that he wants to dedicate all alcohol profits to the hospitals. Most amazing, though, is that our normally anti-government chief executive is talking about having the State once more monopolize the sale of alcoholic beverages. Indeed, Governor Le Page, who opposes Federal funds, says he will support a $298 million infusion of money from Washington to match his efforts of re-directing liquor profits.

Stay tuned.

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