A letter from the Sazerac Co. CEO suggests Gov. LePage’s threat to end sales of 50-milliliter bottles – not a proposed 5-cent bottle deposit – would harm his company and the state.
by Kevin Miller, staff writer
Portland Press Herald news story
AUGUSTA – The head of a Lewiston liquor bottler withdrew his support for a compromise on a 5-cent deposit on miniature liquor bottles after Gov. Paul LePage threatened to end sales of so-called “nips” in Maine, according to a letter sent to a legislative leader.
Sazerac Co. CEO Mark Brown said removing nips from store shelves in Maine – not the imposition of a 5-cent bottle deposit – would have “a drastic impact on our company and our employees” and harm the state’s finances. Brown’s May 15th letter to Senate President Mike Thibodeau contrasts with LePage’s predictions that a 5-cent deposit on 50-milliliter bottles would increase business costs and “put the state’s financial health at risk.”
“While we could have lived with a 5 cent redemption sticker if the state really thought that would solve the littering problem, we can no longer support the legislation while under the threat of having 50 mls delisted,” wrote Brown, whose company produces the Fireball brand of whiskey, which accounts for more than 40 percent of nips sales in Maine. “Such a move would be detrimental to the state’s finances as this is one of the fastest growing sectors in Maine.”
On Tuesday night, LePage issued a statement vowing to veto the 5-cent deposit bill, L.D. 56, and to instruct the Maine Bureau of Alcoholic Beverages and Lottery Operations to begin the process of ending sales of the nips that account for a growing share of liquor sales in Maine. LePage accused lawmakers of supporting the anti-litter bill without caring “if it cuts funding to other state programs or increases costs for companies that do business here.”
LePage said that he would order BABLO to end nips sales “with regret but the severe impact of this bill leaves me no choice.”
“This is yet another anti-business vote that threatens jobs, increases costs to do business and puts the state’s financial health at risk,” LePage said.
But Brown, whose Louisiana-based company is the nation’s largest distiller, suggested in his letter to Thibodeau that ending sales of nips posed the biggest threat to the company. As a result, Brown withdrew support for a compromise he negotiated with Sen. Tom Saviello, R-Wilton, to reduce the proposed bottle deposit from 15 cents to 5 cents.
“Under that compromise, we concluded that we could incorporate the 5 cent deposit into our costs without passing it onto the consumer and without negatively impacting any of the 130 jobs in Lewiston,” Brown wrote in the letter obtained by the Portland Press Herald. “Unfortunately, the situation in Augusta has changed and it has caused us to reevaluate our position.”
Brown said the company “cannot support LD 56 or any other legislation that would have such a drastic impact on our company and our employees.”
“We are proud to be on this journey with Maine as our partner, unfortunately we see LD 56 as a threat to the goodwill we have come to expect from our relationship,” Brown wrote Thibodeau. “We urge you to defeat this issue.”
Supporters of L.D. 56 describe the bill as a way to reduce roadside litter by using Maine’s successful bottle deposit bill to encourage recycling. A fiscal note attached to the bill estimated it would cost roughly $1 million to implement, although supporters argued the delayed implementation date of 2019 would likely reduce those costs.
The Maine Senate voted 32-3 in support of the bill on Tuesday in the first of several votes on the measure. The House endorsed the bill on a 111-34 vote last week.
Sazerac has a vested interest in both the sales of nips and the litter issue.
In fiscal year 2016, Sazerac’s cinnamon-flavored whiskey, Fireball, accounted for 42 percent of all nips sales in Maine, according to BABLO. And sales of both Fireball and nips overall are surging.
In the fiscal year that ended June 30, 2016, BABLO sold an estimated 8.4 million nips bottles to agency liquor stores. That figure is expected to surpass 12 million bottles this fiscal year.
But backers of L.D. 56 contend that untold numbers of those bottles are causing litter problems as buyers toss the single-serve bottles onto roadsides or along the curb.
