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Liquor stores' profits flowing

Booze is big business in the Douglas County area.

It also helps cities balance their budgets.

Sales from the five municipal liquor stores in Douglas County and two others just beyond its borders totaled more than $8.8 million in 2008, according to a just-released report from the State Auditor's Office.

Two city-run liquor operations - Alexandria and Osakis - ranked in the upper echelons in two of the report's key categories.

In terms of gross sales, Alexandria was 12th out of all the city liquor stores in the state (excluding the metro area) with sales just under $5 million.

In terms of profitability, Osakis ranked 24th with a net profit of 10.8 percent.

Six of the seven liquor stores in this area turned a profit in 2008, according to the report. Parkers Prairie was the only one to go into the red; it lost $18,137.

Parkers Prairie wasn't alone. Forty-one other city-owned liquor stores lost money in 2008, according to the report.

The six other stores in this area were able to transfer profits back into other city funds, in effect, lowering taxes that city residents pay.

Alexandria, for instance, made a profit of 7.9 percent in 2008 and transferred $397,907 into the city's coffers.

Other stores and their net profits and transfers: Brandon - 6.9 percent profit, $1,500 transferred; Glenwood - 6 percent profit, $40,000 transferred; Millerville - 3.9 percent profit, $9,680 transferred; Miltona - 4.5 percent profit, $65,000 transferred; and Osakis - 10.8 percent profit, $165,201 transferred.

Minnesota municipalities were originally authorized to own and operate liquor establishments as a means of controlling the sale of alcohol, according to State Auditor Rebecca Otto.

For many communities in Greater Minnesota, municipal liquor operations provide access and convenience in areas that might be unable to attract a privately-run establishment, Otto said.

In 2008, 214 Minnesota cities (two not reporting) operated 242 municipal liquor stores, with 120 cities operating both on-sale and off-sale liquor establishments and 92 cities restricting their municipally-owned establishments to off-sale liquor stores.

Other highlights from the report include:

•During 2008, Minnesota's municipal liquor stores transferred $17.8 million of their profits to other city funds. This represents an increase of 8.9 percent over the total net transfers made in 2007. Transfers totaled $6.8 million among metro area establishments, compared to $11.0 million for Greater Minnesota establishments.

•During 2008, Minnesota's municipal liquor operations reported a 13th consecutive year of record sales totaling $303.0 million. Total sales generated in 2008 increased by $11.3 million, or 3.9 percent, over 2007.

•The combined net profit of all municipal liquor operations totaled $20.4 million in 2008. This represents a decrease of $2.0 million, or 8.9 percent, from the amount generated in 2007. Among on-sale operations, net profits totaled $1.9 million in 2008, which was a decrease of $913,333, or 31.9 percent, from 2007. Total net profits for off-sale operations totaled $18.5 million in 2008, which was a decrease of $1.1 million, or 5.6 percent, from 2007.

•Forty-two Minnesota cities reported net losses for 2008, compared to 31 cities in 2007. All 42 cities with losses were from Greater Minnesota.

•Over the past five years, net profits have increased 9.9 percent. Among off-sale stores, there was a 23.5 percent increase in net profits, while on-sale stores showed a decrease of 46.3 percent.

To view the complete report, which includes an executive summary, tables, and graphs, go to:

Al Edenloff
Al Edenloff is the news and opinion page editor for the Echo Press. He was born in Alexandria and lived most of his childhood in Parkers Prairie. He graduated with honors from Moorhead State University with a degree in mass communications, print journalism. He interned at the Echo Press in the summer of 1983 and was hired a year later as a sports reporter. He also worked as a news reporter/photographer. Al is a four-time winner of the Minnesota Newspaper Association's Herman Roe Award, which honors excellence in editorial writing.  
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