Liquor sales in rural areas

From right, Pamela and Pansy Pettit, pause for a photo Jan. 12 at Pettit's Country Market in Castleford.


CASTLEFORD – City Councilwoman Pansy Pettit’s favorite mixed drink? RumChata and root beer.

But for men, she recommends going straight for the Crown Royal. You can find these — and Castleford’s most popular liquor, Black Velvet Whisky — just left of the front door at Pettit’s Country Market.

The Idaho State Liquor Division is the sole importer, wholesaler and retailer of bottled liquor in the state. But remote towns like Castleford, population 237, can’t support a full state-run liquor store. So the division relies on 105 contract stores to sell in outlying areas like Castleford that aren’t served by any of its 65 state-run stores.

For division director Jeff Anderson, it’s a balancing act.

“We try to make sure we’re convenient, but we’re not on every corner,” Anderson said.

Idaho’s control model of liquor management dates back to events of the early 20th century. In 1933, the 21st Amendment repealed Prohibition and gave states the right to regulate alcohol sales.

“Every state regulates alcohol – it’s just how much control they have in the process,” he said.

In Idaho, beer and wine are an open market, with the state monitoring on-premise consumption only. But liquor is highly regulated.

Even the contract or “agent” stores like Pettit’s Country Market have to keep a meticulous inventory and file annually to renew their contracts. Pettit also has to renew her city, county and state licenses every year.

How it works

In larger cities, the state can decide whether it has the financial ability to lease a building for a state-run liquor store. If a small town wants a liquor store, it first informs the state. The Idaho State Liquor Division will then post a public notice and request for bids, or proposals, from interested businesses.

Pettit, who took over the former Duane’s Market in Castleford in April, said she had to undergo fingerprinting and background checks. Duane’s Market had been the contractor before she’d bought the business, but the change of ownership meant she wasn’t guaranteed to get the contract again.

Her proposal to the state had to include a complete store layout, plus a map of where the liquor would be inside the store.

“Any other business that wanted to do this could have applied,” Pettit said.

But only one gets selected.

Contractors take in liquor from the state on consignment, so stores don’t pay for it until they sell it, Anderson said. The first $350,000 in sales yields a 13 percent commission. Contractors get an 8 percent commission for between $350,000 and $1 million in sales, and anything more than $1 million has a 6 percent commission, Anderson said.

Of the state’s 105 contract stores, the majority sell less than $500,000 a year. Castleford’s store sold just $48,769 in the 2017 fiscal year.

The top state-run liquor store in south-central Idaho was Ketchum’s, with more than $3.6 million in sales. The top-selling contractor was in Bellevue, with $698,479 in sales.

Where does all that money go to? A 2 percent tax goes to drug courts for substance abuse treatment and prevention, Anderson said. The contract stores get their commission. But the rest of the net income is transferred to state and local governments.

In the 2017 fiscal year, the city of Castleford got more than $5,000 for its liquor sales. Twin Falls got $669,388 of its $7.2 million in sales, according to an Idaho State Liquor Division report.

Liquor prices are set by the state every month, and are identical across all stores in Idaho. Bars receive a discount for what they purchase. Pettit’s Country Market is the supplier for both of Castleford’s bars, Longhorn Saloon and King & Harts Club.

‘Just people’

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Pettit’s liquor section stands just beyond some barred-up windows. In the past, she said, the store has had problems with theft.

But the state won’t charge for the stolen liquor if Pettit or her employees catch the theft and report it. If they don’t see the person who did it or get them on camera, however, the store foots the bill.

The state division also understands that accidents happen. If Pettit drops a bottle, she won’t get charged for that either, as long as she doesn’t make a habit of it.

When she runs low on supply, Pettit enters her order into a computer program offered by the state.

“They bring it by truck to us, but you have to buy so much of it,” she said.

With smaller orders, she’ll pick up what she needs from the liquor store in Twin Falls. Pettit marvels at the size and layout of the state-run stores, which carry a wide selection.

“We do have an exceptional selection of product,” Anderson said. “We operate this as a business, as you will, but we are a state agency.”

The state keeps up on trends too. Vodka remains Idahoans’ liquor of choice, but bourbon and whiskey are quickly rising, said Idaho Division of Liquor CFO Tony Faraca.

In December, when Pettit saw a spike in liquor sales, the state came out with several gift boxes. The most popular: A bottle of Crown Royal with glasses embossed with crowns.

“When it comes down to it, government is just people,” Pettit said.

And she would know. The city councilwoman is the friendly face that greets people when they walk in the door from a long day of work. Most of her liquor sales happen at night.

“People around here, they work so hard,” she said. “They need a good drink.”


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