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Bemidji city liquor stores see 8 percent profit

Bemidji's municipal liquor operations sent $214,505 in 2008 to subsidize other city operations, according to a state report.

The city's two liquor stores saw net profit of $364,575 in 2008, or 8 percent of sales, State Auditor Rebecca Otto's annual study of municipal liquor operations in Minnesota, released last week, shows.

During 2008, Minnesota's municipal liquor stores transferred $17.8 million of their profits to other city funds, the report states. It 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 million for rural Minnesota establishments.

During 2008, Minnesota's municipal liquor operations reported a 13th consecutive year of record sales totaling $303 million. Total sales generated in 2008 increased by $11.3 million, or 3.9 percent, over 2007.

Bemidji reported $4.55 million in liquor sales in 2008, with costs of sales at $3.39 million, yielding gross profits of $1.15 million or 25.4 percent of sales.

Bemidji's gross sales ranks the city 16th in the state among 214 cities with municipal operations, or third among outstate operations with Alexandria 12th and Detroit Lakes 15th. Lakeville, at $14.4 million in gross sales, is the state's leader.

Bemidji ranked 57th, however, for its percentage of net profit. The leader was Northome at 57.3 percent, but that was based on only $3,950 in gross sales.

In the Headwaters Region, Park Rapids nearly matched Bemidji's transfer of liquor store profits to other city functions, at $213,017, based on $2.88 million in gross sales, or 9..2 percent.

Blackduck reported gross sales of $806,407, Kelliher $461,869, Bagley $891,376, Akeley $419,310, Clearbrook $421633 and Nevis $490,358. Mahnomen had $1.03 million in gross sales, and Walker $872,480. Walker transferred $160,000 or 11.2 percent to other city operations.

The combined net profit of all municipal liquor operations totaled $20.4 million in 2008, the Otto report said. It represents a decrease of $2 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 rural 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.