AUGUSTA — The state has picked Pine State Trading to run Maine’s wholesale liquor business for the next 10 years.
The Bureau of Alcoholic Beverages and Lottery Operations announced mid-morning Thursday that Pine State will oversee what’s being called “spirits administration.”
The company bid almost half as much as its competitor, All Maine Spirits, also out of Augusta.
The new contract is expected to be a much more lucrative deal for the state than the current one with Maine Beverage. The state has received roughly $190 million from that contract, which included a clause for profit-sharing.
It’s projected to see $450 million over the next 10 years under the new terms.
“The new spirits contract will allow the state of Maine to take back the significant revenue created by the spirits business,” Gov. Paul LePage said in a news release. “My plan allowed us to repay Maine’s hospitals and will allow the state to invest in clean water programs, transportation projects and increase the balance of the rainy day fund.”
The new contract is expected to cover $183.5 million in revenue bonds taken out by the state to pay old debt to Maine hospitals.
Pine State had already been doing subcontractor work for Maine Beverage, according to Bureau of Alcoholic Beverages and Lottery Operations Director Gerry Reid, so there’s little risk of distribution issues once the new contract takes effect in July.
The new contract is expected to pay liquor agents more and to allow the state to strategically lower some prices and recapture sales lost to New Hampshire.
Department of Administrative and Financial Services spokesman David Heidrich said the request for proposals required companies to bid to run the system based on the percentage of net sales. Pine State proposed 4.7 percent; All Maine Spirits proposed 7.88 percent.
Based on state projections, the contract could mean $80 million to Pine State over 10 years.
No award has been made yet for spirits trade marketing. CDM Communications in Portland, Dirigo Spirit in Cumberland and Pine State Trading all bid on that separate contract.
Dirigo Spirit is fronted by Ford Reiche, who founded Safe Handling in Auburn.
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