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State liquor director opposes privatizing stores

State liquor director opposes privatizing stores

Idaho Freedom Foundation staff
February 11, 2010
Idaho Freedom Foundation staff
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February 11, 2010

The Idaho State Liquor Division has seen a steady rise in profits during the past few years, and director Dyke Nally said lawmakers should not consider privatizing liquor sales. “Why would the state give up $45 million?” Nally asked the Joint Finance-Appropriations Committee Thursday. Liquor sales brought in that amount to cities, counties, and the state general fund in the last fiscal year. “The only way I could support [privatization] as a taxpayer and a citizen would be if I got the contract.”

Rep. Darrell Bolz, R-Caldwell, asked Nally about privatizing liquor sales because Washington state is considering a similar measure. Virginia is also looking at a potential one-time windfall of $500 million from privatizing stores, according to the Wall Street Journal. Idaho’s liquor division has $15 million in annual operating costs. Nally said a down economy usually spurs this idea. “During these tough times, privatization is being talked about more and more and more,” he said. Nally said most other control states, which have state agencies in charge of the distribution of alcohol, usually decide not to privatize. Nally said it’s also about more than economics. “Our mission is to promote temperance first and foremost, and second is to promote profit.”

The 57 percent increase in Idaho liquor sales comes from two factors, according to Nally: an increasing population and a shift to higher-end, costlier spirits. He said he’s seen some customers go back to cheaper brands in the worsening economy, and said the state is trying to profit on that trend. The liquor division raised its prices 15 to 20 cents on bottom shelf alcohol, which could bring in up to $268,000 in the current budget. “We saw that our prices (for these brands) were lower than surrounding states,” Nally said.

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