Private liquor sales unlikely

BOISE – Privatizing liquor sales in Idaho wouldn’t work and won’t happen, state liquor chief told lawmakers Thursday.

“In Washington, they’re just rattling cages and talking about it,” said Dyke Nally, director of Idaho’s state liquor division. “No state has ever privatized, by the way, since 1933.” The reason: “When they get to the end, they say, ‘This is a pretty good business for the state – why give this up?’ “

Idaho collected a record $45 million in liquor profits last year, Nally reported. “It’s the people’s business – the people of the state of Idaho own this business, and the moneys go back to the people from the profits,” he said.

Washington is considering privatization as a possible money-making move, although a report from state Auditor Brian Sonntag suggested the state could actually lose money, unless it allows significant increases in the numbers of liquor stores.

In Idaho, the main mission of the state liquor division is to promote temperance – something required by the state Constitution. Its secondary mission is to sell liquor.

“It’s not an ordinary product we’re selling,” Nally told the Joint Finance-Appropriations Committee.

Alberta, Canada, privatized its liquor sales in 1993.

“The minute they privatized, they had three times as many stores, the product costs more, not less, because there’s another markup,” Nally said. “The product becomes much more available, people aren’t trained as well like the state stores are, the hours are longer because you’re marketing the product.”

Idaho’s state liquor program doesn’t advertise liquor because of its temperance focus, Nally said.

“Our mission is to promote temperance first and foremost, and then sell the product,” he said. “We’re not open in the middle of the night. … And I would doubt if Washington will get very far – no one ever has, once they really debate this.”

Washington, which makes $320 million a year from state-controlled liquor sales, convened a citizens review committee in 2000 that concluded the state would be better off not privatizing, based on both costs and public health and safety issues.

In the past three years, Idaho has converted three of its smaller contract liquor stores to full state stores; it’s proposing one more next year, in Oldtown in North Idaho, “where we have extremely strong sales,” Nally said.

Many customers are from cross-border traffic with Canada. “This one is in a grocery store up there – it’s a draw to the grocery store, but it isn’t particularly helping our service and profits, so we’re going to be negotiating conversion of that to a state store,” Nally said.

Conversion of a contract store to a state store typically improves selection and service, and boosts sales by about 25 percent, he said.

Idaho began permitting Sunday sales of packaged liquor in 2004 by county option, and 29 of 44 counties now allow it, Nally said.

“I’m happy to report that we have no problems or complaints from that,” he said. “It’s generated about $3.5 million more in revenue and it’s particularly important in our tourist areas where people are coming in from all over the country.”