Closing time

The legislative commission studying the opening of a state-owned discount liquor store in Fort Kent has made the right call in opposing it. Even better is its recommendation that it might be closing time for the new bargain booze outlet in Calais.

Not because there’s anything wrong with letting the residents of Aroostook and Washington counties save a few bucks per bottle. The vast majority of folks in those economically struggling regions lead lives of responsible moderation. They have resisted the temptations of the cheap beer and wine available at every gas station and are not likely to succumb to the state’s cut-rate rye.

The problem with these discount stores is that they pose as economic development when they’re anything but. The Fort Kent discount store was opposed as unfair state-subsidized competition by many local retailers who paid out hard-earned money for the licenses (at least $2,000 upfront and another $300 annually) and stock (at state-mandated prices) to run agency liquor operations in their groceries and convenience markets.

Those retailers weren’t just acting on a hunch. The evidence from the Calais outlet, after just its first few months, is that an ersatz business that can operate at a loss because it’s propped up by tax dollars hurts real businesses. Hard to believe.

Comparing liquor restocking purchases through the state wholesale outlets of this October to a year ago, the Calais discount store has cost a Woodland grocery about 62 percent of its liquor sales. A Calais convenience store is down by 48 percent. These businesses are important to their communities. They pay taxes, they hire employees and they need agency liquor sales as a part of their revenue stream.

Legislators were warned of this before they approved the Calais store last year. They ignored the concerns, they shunned logic, they insisted that this was economic development of the finest kind; cheap booze would be a magnet that would lure shoppers from throughout Maine and the Canadian Maritimes.

From the start, it’s been clear the Canada angle was wishful thinking. The Canadian government has spent years perfecting the fine art of preventing cross-border shopping and they have all the necessary taxes, duties and length-of-stay rules in place. Add to that the Canadian dollar’s current value of roughly 65 cents and everyone but a starry-eyed legislator could see that there was no way New Brunswickers were going to be flocking to Calais for their distilled spirit needs.

The only upside of this Calais mistake is that the discount store is, overall, pretty much of a flop. According to Robert Newhouse, who oversees store operations for the state alcoholic beverages bureau, the decline in agency sales, while dramatic in the immediate Calais vicinity, drops off rapidly and virtually vanishes outside of a 20-mile radius.

It’s good news that agency stores in Eastport, Pembroke and beyond haven’t been damaged much, but they should not be damaged at all. The bad news would be that cheap liquor is not drawing out-of-town shoppers to Calais. Of course, that could change somewhat if the state manages to drive that Woodland grocery out of business.

This sad episode has those with a sharp eye for bumbling at the state level seeing double. First, it points out, once again, the foolishness of Maine’s involvement in retail liquor. There are some 200 agency stores, supported by the ingenuity and hard work of the private-sector owners and employees. There are 28 state stores, supported by taxpayers to the tune of $8 million a year. The agency stores are compelled to buy their liquor from state warehouses, the prices they are allowed to charge are set by the state, with no unauthorized specials or promotions allowed. It’s just so Soviet.

Second, and worse, is what this says about the prospects for economic development in Maine’s struggling regions. It’s too much to expect every legislator to be an expert in how to revive a declining economy, but when local merchants, the Canadian government and common sense all say the same thing, it’s not too much to expect them to pay attention.