Idaho’s state Liquor Division has a proposal to add two new stores in the Treasure Valley next year to address market growth and development patterns in the area. That would take Idaho from 66 to 68 state-owned liquor stores, the first increase since 2009; roughly 35 of those stores are located in the Treasure Valley, including both Ada and Canyon counties. The division also is proposing some remodeling work and possibly relocation of some existing stores whose leases are up, depending on bids and market studies. Sen. Dean Mortimer, R-Idaho Falls, questioned the request, along with another to standardize hours at stores in the same communities by adding hours at some stores.
“I’ve got some concerns,” Mortimer said during the division's budget hearing this morning. “I really question the return. … If it’s just a matter of convenience, I’m not sure I want to expend our dollars for convenience.”
State Liquor Division Director Jeff Anderson, who also serves as director of the state Lottery Commission, two state agencies that used to each have their own director, said the changes would bring very significant return on investment.
“We believe if we’re going to be in this business, we should be in it and be responsible, and serve the patrons,” Anderson said. “We haven’t asked for new stores since I’ve been there.” He’s headed the liquor division since 2010.
Anderson offered some examples of store moves in the past that brought big returns. “These may not be entirely fair comparisons,” he said. “We had a store in Wallace, Idaho, that was trending down,” with sales around $400,000 a year. That store was converted to a contract store, run by a private-sector contractor, and that state-operated store was moved to Stateline, Idaho. “And the $400,000 became $8 million,” Anderson said. Amid some laughter, he said, “That’s not a fair comparison, but I had to get it in there.”
In another instance, the division had a store in Weiser whose lease was coming due, and the store had sales of around $400,000. That one also was converted to a contract store, and the state store was moved to 10 Mile and Ustick roads, “where Meridian and Nampa are starting to meet. That $400,000 store became $2 million or $2.5 million,” Anderson said.
“The ones that we’re going to establish in the Treasure Valley may not be as profound as those two in terms of the differences,” he said. “But still … consumers are overwhelmingly responsible consumers. To ask someone to drive four or five miles of two-lane road to get to Overland and Five Mile just doesn’t seem right. I understand your concern,” he told Mortimer, who responded, “Thank you,” “but we think it’s good business practice,” Anderson said.
He added, “We take our responsibility seriously.”
As a control state, Idaho controls all sales of hard liquor in the state, serving as the only wholesaler of distilled spirits, the operator of state-owned liquor stores, the overseer of contract stores, and the wholesaler to licensed premises that sell liquor by the drink. The Liquor Division isn’t involved with beer or wine sales.
The division returned $68.7 million in proceeds to the state in fiscal year 2016, and is forecasting the fiscal 2017 distribution at $72.2 million.
“We are citizen-owned for the benefit of all,” Anderson told JFAC. “Idaho’s model of distilled spirits distribution works for all citizens,” he said, and has resulted in lower per-capita consumption of spirits in Idaho and far fewer outlets selling hard liquor per capita than in non-control states.
“Idaho per-capita consumption remains well below national averages, and even less when we factor out cross-border sales to Washington state,” Anderson said.