Friday, April 18, 2014
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Manager Jim Frey arranges bottles Thursday at Bow Street Market in Freeport. Store owner Adam Nappi said he’s glad to continue working with Pine State Trading Co., which was awarded a new state liquor contract.
Gordon Chibroski/Staff Photographer
Adam Nappi, owner of the Bow Street Market in Freeport, said he’s glad to continue to work with Pine State Trading.
“They bring innovation, experience and stability to the Maine marketplace. We look forward to working with Pine State in responsibly growing spirit sales in Maine,” Nappi said in a prepared statement. “Bow Street Market would also like to acknowledge and thank All Maine Spirits for their bid. They brought competition to the process and Mainers will benefit from that.”
HIGHER REVENUES TO HELP PAY OFF BOND
Maine Beverage won its contract in 2004, when the state needed help to close a $1.2 billion budget deficit. The company got the contract for an upfront payment of $125 million.
Maine Beverage is owned by Martignetti Cos., which also owns a liquor operation in New Hampshire, and the New York private equity firm Lindsay Goldberg & Bessemer.
The contract guaranteed Maine Beverage a gross profit of 36.8 percent of annual sales. From 2004 through 2012, the company collected about $339 million in gross profits, after revenue sharing, according to data provided by the state.
The state says it received about $190 million over the 10-year contract, including the upfront payment of $125 million.
A new liquor contract that gives the state a greater portion of sales revenue is part of Maine’s plan to pay off $183.5 million that it owed to the state’s hospitals.
In September, the state sold a $220 million bond that will be repaid with revenue from the liquor contract. The proceeds from the bond were used to repay the hospitals, with additional funding for transportation, clean water projects and the state’s rainy day fund.
“Today is a great day for Maine,” Gov. Paul LePage said Thursday in a prepared statement. “The new spirits contract will allow the state of Maine to take back the significant revenue created by the spirits business.”
The Bureau of Alcoholic Beverages and Lottery Operations said the new contract also will enable the state to cut prices for “high-traffic spirits,” so it can compete better with low-cost alcohol sold in New Hampshire. Maine is one of 18 states where the government controls the sale and price of spirits.
Staff Writer Edward D. Murphy contributed to this report.
Jessica Hall can be contacted at 791-6316 or at: