AUGUSTA (AP) – As Maine Beverage Company LLC prepares to assume control of statewide liquor distribution this month, the company also has pitched a plan that would completely revamp the state’s current pricing of distilled spirits.

Representing Martignetti Cos. of Norwood, Mass., Kay Rand said her client, a partner in Maine Beverage, wants the state to reconsider its pricing system in favor of something simpler that would establish a flat rate.

Converting to a flat markup system would bring “clarity” to the process, Rand said, adding that consumers would see no increase in liquor prices.

“If there’s any change at all, it would probably be a reduction in costs,” she said.

Most states use a flat-rate formula, Rand said. Maine, however, relies on a variety of comparative factors that include brand names, quality of liquor, bottle sizes, and popularity of liquors.

Some out-of-state wholesalers have even wondered whether Maine’s pricing system is biased toward in-state wholesalers. Maine Beverage is encouraging the change in hopes of “a level playing field” for all suppliers, Rand said. The state pricing system is subjective and varies among competitors, Rand said.

“A formula would promote predictability and create the opportunity to market new products in Maine as a test state,” she said. “New products don’t enter this market because the price is likely to be higher.”

The director of Maine’s Bureau of Alcoholic Beverages, Pam Coutts, said a special state panel charged with implementing rule-making for liquor pricing is expected to decide on Maine Beverage’s request later this year.

Dean Williams, president of Maine Beverage, said that besides inspiring predictability, a formula price system would allow the state greater flexibility in confronting the changing “trends and fashions” in the retail liquor business.

“Pricing can now be brought out of the subjective’ or back-room phase’ and stand the scrutiny under the brightest of spotlights,” Williams said in a letter to the state Department of Administrative and Financial Services.

Maine Beverages is a partnership consisting of Martignetti Cos., Pine State Trading Co. of Augusta and Lindsay Goldberg and Bessemer, the New York financial group that holds the majority interest in the limited liability corporation.

Last year, Gov. John Baldacci and the Legislature eliminated part of a $1.2 billion deficit in the state’s two-year budget by privatizing Maine’s wholesale liquor business.

Under its agreement with Maine Beverage, the state has already received the first $75 million of its $125 million contract. The balance is due July 1.

AP-ES-06-18-04 0217EDT



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