Star Tribune: Shorewood To Sell Liquor Stores
Facing tough competition from MGM and others, the city of Shorewood has decided to sell off its two city-owned liquor stores.
Shorewood’s operations don’t always make a profit. Because of a one-time adjustment to employee benefits, the stores lost almost $16,000 in 2006. Although the business is showing a profit of $20,033 thus far this year, in March the council reviewed a study which noted the strong competition in the area and the potential for it to hurt Shorewood’s sales.
It’s an interesting philosophic and economic move considering how much profit other cities make from their municipal-owned liquor operations.
Eden Prairie made almost $1.1 million from its three locations in 2005 — the third highest municipal profit in the state, according to the Office of the State Auditor.
Wayzata made $218,624 in 2005 from its store and bar. That same year Mound lost money — almost $118,800 — because it built a new store.
While the city loses the income, consumers should benefit from the increased competition. As we posted over a month ago, a Legislative Audit report reveals that municipal liquor stores tend to charge prices that are about 3 to 8 percent higher than privately owned liquor stores.
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I couldn’t understand some parts of this article, but I guess I just need to check some more resources regarding this, because it sounds interesting.