Liquor Chief Mulls Booze In Grocery Stores

About 5 minutes into his testimony to state budget writers Monday, Commissioner Mark Bodi made a glancing mention to what could prove the most conspicuous shift in state alcohol marketing policy since grocers were given permission to sell wine 30 years ago.

“The commission is currently reviewing how we might expand the sales of spirits specifically through greater agency store operations. However that review continues and I’m not in position today to offer any short estimates as to what the likely revenue from any expansion of agency stores would create.”

Outside the hearing room, Commissioner Bodi continued to play things pretty close to the vest. When asked for a ballpark notion of what state might gain by putting hard liquor in grocery stores, he said millions and left it at that. Bodi did say however, that new agency stores would be tailored to meet the needs of consumers and retailers alike.

“In areas where there are strong demands, grocery stores would have a significant number of spirit offerings. In areas where there is lower demand, you would have an opportunity for a small mom-and-pop store to add a few skews of vodka and bourbon as a convenience item.”

The New Hampshire Grocers Association, which has pushed to sell liquor in the past, says it’s talked to Bodi about his plans. Yet association president John Dumais says the issue isn’t cut and dried. He says hours of sales and security would be prime concerns, as of course, would be profit margins. But Dumais says he likes the basic math.

“What there’s only 76 liquor stores in the entire state, and we have 1200 grocery stores selling beer and wine today. There’s a lot more opportunity to help the out of state tourist have more access to these products.”

Dumais’s stress on tourist convenience is no accident. Sales to out-of-staters is one of the main reasons NH leads the nation in per capita alcohol sales; and cross border trade has long accounted for about half of all liquor revenue. Last year that topped out at more than 140 million dollars. Liquor is on pace to exceed that this year, but earnings still lag behind forecast. Democrat Lou D’Allesandro chairs the state senate’s finance committee. He says lawmakers need to give liquor commission the freedom to try something new - particularly as the state struggles to close a gaping budget gap.

“It’s been profitable, we’ve done a good job with it for 75 years, but now it’s a much different situation.”

Other top lawmakers are more skeptical.

“If in fact the liquor commission can do a better job in lowering operating costs and increasing revenue let’s see some evidence of it.”

Marjorie Smith of Durham is chairman of the House’s budget writing committee. She notes that 6 months ago lawmakers acceded when the commission wanted to cut its wine discount for grocery stores, and are still waiting for the promised profits to materialize. Smith added though, that circumstances dictate giving any proposal a long look.

“We choose things like liquor and lottery as ways that are supposedly not as painful as other alternatives to generate revenue for essential services. Those services are still essential; we need the revenue, and we have to figure out how we are going to get it.”

And finding the gains from creating more agency stores is key. When Commissioner Bodi testified to lawmakers he highlighted increased sales. But according to Steve Schmidt, who works for the association of 18 states that control alcohol sales, the spending side of the ledger – particularly in a state like NH -- may be more relevant.

“If there is significant market penetration than I’m not sure what the purpose for creating agency stores would be except to jettison some costs.”

Until the proposed changes are committed to paper, that part of the equation will remain a mystery. But if Commissioner Bodi’s words are anything to go by, job cuts -- a step Governor Lynch has said he’d like to avoid – are part of the plan.

It’s not a, it’s not a.......We would not anticipate that reductions in workforce would be significant. It’s really just applying the contemporary retail practices that are used every day by Dunkin Donuts and McDonald’s to a state agency.”

Bodi says he’ll flesh out the commission’s proposal in the coming weeks with the hope of presenting it to lawmakers later this winter.