Minnesota State Beer Facts
Have you ever wondered how Minnesota beer and liquor prices compare to other states? The facts come from a surprising source: Legislative Audit Commission .
Also, the 2006 report outlines how Minnesotan beer and wine consumers would financially benefit from a change in the way those products are distributed.
Here are a few highlights:
- Adjusted for differences in taxes and dram shop insurance costs, off-sale beer prices are 7 to 9 percent higher in Minnesota compared with Wisconsin, where there are few state restrictions on retail competition.
- However, adjusted prices for distilled spirits are 8 to 10 percent lower in Minnesota despite the state’s more restrictive retail environment. The state’s prohibition on the use of exclusive territories for the wholesale distribution of spirits is most likely responsible for Minnesota’s lower off-sale retail prices.
- Overall, adopting less restrictive retail laws like those in Wisconsin could save Minnesota consumers about $100 million annually. But such law changes would negatively impact existing private liquor stores and jeopardize the $16 million in annual profits that municipal liquor stores currently provide for city services.
- Within Minnesota, municipal liquor stores tend to charge prices that are about 3 to 8 percent higher than privately owned liquor stores. Municipal liquor stores are able to charge higher prices because of the monopoly most of them have within city boundaries. However, the proximity of liquor stores licensed by a county or neighboring city keeps the price difference at a modest level.
- While there would probably be significant price savings for consumers, banning exclusive territories for beer and wine distribution might limit product availability and reduce other consumer benefits.
- 226 Minnesota cities operated municipal liquor stores in 2004. These cities, representing close to 18 percent of the state’s population, generally do not allow private off-sale liquor stores to operate within their boundaries.
- Overall, Minnesota ranked 9 th highest among the 50 states in 2002 in revenues from government-operated retail stores and wholesale operations.
- Even though Minnesotans consume about 9 percent more alcohol than the national average, state laws have restricted the number of off-sale liquor stores selling strong beer, wine, or spirits to well below the national average. Minnesota has fewer off-sale liquor outlets per adult than 40 other states and the District of Columbia. The number of off-sale outlets per adult is only about one-third of the national average.
- Minnesota’s lower spirits prices suggest that consumers might benefit significantly from additional competition in the wholesale distribution of beer and wine. Studies of beer distribution suggest that banning exclusive territories reduces retail beer prices. However, banning exclusive territories may also reduce the freshness of beer and limit product selection and availability.
July 9, 2007 | Filed Under Beer, Eastern Suburbs, Minneapolis, Northern Suburbs, Southern Suburbs, St. Paul, Twin Cities Metro, Western Suburbs
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