State chooses firm to operate liquor business

AUGUSTA – The Baldacci administration designated Martignetti Companies of Massachusetts on Friday as the winning bidder for the right to operate the state of Maine’s wholesale liquor business for 10 years.

The bidding price of $125 million was set by the state, but the four competitors were allowed to sweeten the deal through other means.

Administration officials said setting a base price was designed to focus bids on quality of service. But a revenue sharing option proposed by Martignettis’ could produce an additional $25 million to $40 million over the course of a 10-year lease, officials said.

A final contract approval is expected by March 19, with the winning bidder taking over operations by July 1.

“We’re obviously delighted,” said Kay Rand, an Augusta-based consultant representing the Massachusetts firm.

The successful bidder gains the exclusive right to distribute alcoholic beverages and fortified wines within Maine. The Bureau of Alcoholic Beverages and Lottery Operations would continue to regulate prices.

Upon assuming management of the state operations, a private operator would be responsible for housing and shipping liquor products. That would involve receiving orders from agency liquor stores, making deliveries and collecting payment.

Maine, which currently has about 280 agency stores, has a long history as a liquor control state. It was the first state in the nation to outlaw the sale of alcoholic beverages in 1851, and remained a dry state until 1934, shortly after the nationwide Prohibition was repealed.

Four bidders entered the competition last month, including Maine Centric of Auburn, Maine Liquors of Augusta and Reid’s Distribution Center of Bangor.

Martignetti, based in Norwood, Mass., is expected to service Maine’s liquor business from Gorham.

“We’re ahead of schedule, which is a good thing because we still have a lot of work to accomplish,” said Richard Thompson, the state of Maine’s chief information officer who served in the bidding process as the state’s RFP coordinator.

Proceeds from the planned privatization are to be used to help balance the current two-year state budget.

State officials said Friday that Martignetti’s bid offered to share with the state 50 percent of profits above a minimum level outlined in the companies’ proposal.