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New liquor division director doesn’t foresee changes to state-run system soon

New liquor division director doesn’t foresee changes to state-run system soon

Idaho Freedom Foundation staff
May 13, 2010

The new man in charge of Idaho’s liquor division, Idaho Lottery Director Jeff Anderson, said he doesn’t expect people will see any changes to state-run liquor stores or alcohol policy, but said he’ll try to implement some of the business practices he said have worked at the lottery.  Anderson is in his second week of directing the state’s liquor division.  Gov. Butch Otter appointed him to lead the agency after Dyke Nally decided to retire after 15 years in charge.

“Dyke Nally was there for a long time,” Anderson told IdahoReporter.com.  "We’re different people with different styles.”  He said he’s still getting adjusted to his dual responsibilities leading two state agencies that generate revenue for the state.  Anderson also has little interest in changing Idaho’s alcohol policy, including allowing liquor sales in grocery stores.  “The control state model works pretty good for us,” he said.  “It’s one that fulfills the dual constitutional mandate of making the product available while at the same time managing its availability to curtail intemperate use.”

Lawmakers in Washington state and Virginia, which like Idaho have state-run liquor stores, have brought forward plans to privatize liquor stores in an effort to bring in more revenue or reduce the number of state employees.  Idaho paid the 201 liquor division employees $9.9 million in wages and benefits in the last fiscal year, though liquor sales also generated $45 million for cities, counties, and other state funds.

Another potential change to alcohol policy Anderson opposes is allowing samples of hard alcohol at state-run stores or Idaho distilleries.  “I have no plans to allow sampling in state stores,” he said.  He understood the comparison to breweries and wineries that offer free samples to encourage purchases, but said that model wouldn’t work for vodka, rum, or other spirits.  “Distilled spirits are a different ballgame.  And for many products, there are mini bottles you can sample without buying a big $20 bottle.”  A plan to allow sampling in distilleries failed in the Legislature earlier this year.

Jeff Anderson

Idaho’s liquor sales and lottery sales use different business models besides having state-run liquor stores and allowing convenience stores and grocery stores to sell lotto tickets.  The state doesn’t advertise its liquor stores, though alcohol companies do promote certain brands, and limits hours of operations.  “The reason the stores aren’t open from 6 a.m. to 2 a.m. seven days a week is because we’re trying to curtail intemperate use,” Anderson said.  “That’s a balancing act that we have.”

Idaho’s lottery, however, does promote products on television and other media.  “At the lottery we do advertise, because we have new products that come out frequently,” Anderson said.  “But we’re very focused about responsibility and responsible play here.”

Both state liquor stores and the state lottery have seen increased revenue during the past few years, which Anderson said hasn’t been irresponsible growth.  He said lottery revenues are up because the state now has a more balanced selection of scratch tickets and draw games.  As for alcohol, he said population growth and more expensive taste had led to higher sales.  “Up until the recession, people were trading up,” he said.  “They weren’t necessarily drinking more, but they might be buying Grey Goose (vodka) instead of Smirnoff.”  The latest liquor division annual report showed overall revenues outpaced the sale of individual bottles of alcohol, but that bottle sales rose almost 30 percent between fiscal year 2005 and fiscal year 2009.

Anderson’s added responsibility overseeing the liquor division comes with a 20 percent pay increase, though the state will save $80,000 a year with him taking a dual role.  “The governor was looking for ways to save money, and this does that,” Anderson said.  “This concept of a single executive overseeing multiple operating units is nothing new in private business.”  In his former job in television broadcasting, Anderson managed TV stations in Boise and Idaho Falls.

Idaho isn’t the most welcoming state for alcohol or gambling, due to its large Mormon population, but Anderson said he is mindful of the state’s population, and that both state agencies he directs try to be responsible in generating money for the state.  “If you’re in the Bible Belt or in Idaho or Utah, the cultural makeup of the state is different, and we try to be very sensitive to that,” he said.

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