Under-performing liquor stores? Is it possible?

I noted in the first podcast that in his  proposed budget, Gov. John Lynch proposes closing a number of “under-performing” state liquor stores. According to news reports, a total of 16 stores face closure.

I couldn’t find any word on which particular stores these might be, though it stands to reason that those liquor stores frequented by the Dandy Scotch Brawlers have nothing to fear as our level of consumption no doubt prevents them from being labeled “under-performing.”

In his address, the governor said the under-performing stores will be replaced with “agency stores,” though I’m not quite sure that means.

For those interested in the fate of New Hampshire’s state-run liquor stores (and who among us isn’t?), I thought I’d share the following liquor store excerpt from Gov. Lynch’s budget address delivered on Feb. 12 of this year:

“As we look at how we fund our general fund obligations for the future, we must also look at how we maximize our existing assets.

One of our biggest assets– if we let it be – is our state liquor stores.

As we developed this budget, we looked at a number of models for our state liquor stores, including selling them completely. As we analyzed the options, it became clear that full privatization was not in the best financial interest of the state. Private companies could not deliver the same revenue stream into the future because they would not share our federal tax exemption.

But continuing to operate the state liquor stores exactly the same way we do today is also not in the best financial interest of our citizens. An independent analysis of our state liquor stores identified a number of areas where we could increase returns.

This budget implements a plan by the liquor commission to close a number of under-performing stores, and to replace them with agency stores. That would provide for better service for customers and increased returns for all taxpayers. We recommend investing some of the savings in building one to two new stores in growing markets.

We are proposing to lease the land near state liquor stores, including those at the welcome centers in Hooksett and Hampton. If we are honest, these welcome centers are not very welcoming. They are old, rundown and lack many of the basic amenities that people expect.

By leasing them, we can provide better services for travelers. And 20-year leases, along with selling the Concord warehouse, will generate $30 million for the general fund in the next biennium.

If we are to maximize this asset for our citizens, we need to let the liquor commission run like a business. We need to give the Commission greater authority to close under-performing stores and open new ones. We need to allow it to sell additional products, and we need to allow it determine its own prices, discounts and the amount of stock it carries.

These changes will result in an additional $50 million over the next two years, and potentially greater returns in the future.”

The governor’s entire budget speech can be found here.



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