Idaho State Liquor Dispensary Serving Idaho Since 1935 2001 Annual Report Idaho State Liquor Dispensary Idaho State Liquor Dispensary 1349 E. Beechcraft Court P.O. Box 179001 Boise, Idaho 83717-9001 (208) 334-5300 2001 Annual Report Idaho State Liquor Dispensary 2001 Annual Report Background and History 2 Superintendent’s Message 3 Organization Structure/Liquor Store Locations 4 United States and Idaho Apparent Per Capita Consumption of Distilled Spirits 5 Profit Distribution 6 Retail Price Components 7 Five Year Bottle Sales Comparison 8 Five Year Gallon Sales Comparison 9 Five Year Employee Compensation to Sales Ratio Comparison 10 Balance Sheet 11 Statement of Changes In Fund Equity 12 Income Statement 13 Operating Expenses 14 Schedule of Comparative Sales and Distribution of Profits by City/County 15-22 Ada County – Bingham County 15 Blaine County – Boundary County 16 Butte County – Clearwater County 17 Custer County – Gooding County 18 Idaho County – Kootenai County 19 Latah County – Minidoka County 20 Nez Perce County – Teton County 21 Twin Falls County - Washington County 22 Table of Contents Table Idaho State Liquor Dispensary Background and History he Idaho State Liquor Dispensary was established in feature a selection of products specific to the tastes and 1935, following the repeal of prohibition, as a means lifestyles of the local communities they serve. All products are of providing greater control over the distribution, priced uniformly throughout the state. The Dispensary paid Tsale, and consumption of alcohol beverages. Organizationally, $3 million to the private sector for contract fees and for store the Dispensary has been a division of the office of the gover- leases in FY 2001. nor since 1974. The Dispensary’s central office and warehouse are locat- Idaho is one of 19 “control” jurisdictions that control the sale of ed in Boise. A Central Office staff of 21 and three District alcohol beverages. (Eighteen control states and Montgomery Managers manage all administrative aspects of the business; County, Maryland). These jurisdictions account for almost one- including purchasing, accounting, information technology, third of the U.S. population, and regulate their own retail human resources, contracts, and store supervision. Eleven and/or wholesale distribution of alcohol beverages. warehouse personnel, co-located with the administrative office, receive, store and distribute more than 600,000 cases At fiscal year end, the Dispensary operated 155 retail annually over a geographic area of 83,000 square miles. The outlets throughout the State. Of those, 51 were state liquor warehouse typically contains about 125,000 cases valued at stores staffed and operated by Dispensary employees, and $5 to $6 million. 104 were contract agencies located within private businesses. Stores are typically open from 11:00 a.m. to 7:00 p.m. A few Idaho’s system of liquor control provides benefits to all of stores are open from 10:00 a.m. to 9:00 p.m. for extended Idaho’s citizens. Moderation and temperance in control states customer service. The largest store has sales of $2.8 million in generally reduce social costs associated with alcohol con- FY 2001; 18% more than the prior year. Statewide, stores sell sumption. Additionally, Idaho law provides for the distribu- nearly six million bottles annually. Each state and contract tion of liquor profits to State programs, 44 counties and 201 store is stocked and maintained to meet the needs of cus- cities. Over the last decade nearly $180 million was distrib- tomers including liquor-by-the-drink establishments. Outlets uted to state programs, counties and cities. ■ 19 Control Jurisdictions • Alabama • Idaho • Iowa • Maine • Michigan • Mississippi • Montana • New Hampshire • North Carolina • Ohio • Oregon • Pennsylvania • Utah • Vermont • Virginia • Washington • West Virginia • Wyoming • Montgomery County, MD 2 2001 Annual Report Superintendent’s Message t is my pleasure to submit The 66th Annual Report of the Idaho State Liquor Dispensary. I Fiscal year 2001 continued to show substantial increases in sales and profits. Increased sales are directly related to increasing population and purchases of more premium products. Per capita consumption remains among the lowest in the nation. Sales have increased from $65.6 million in FY 2000 to $69.7 million in 1 FY 2001 or 6 /4 %. Profits have increased by $1.6 million to $21.8 million in FY 2001. Our productivity continues to increase and compares very favor- ably with similar wholesale/retail businesses in the private sector. The Dispensary has paid two of three annual installments of $788,900 each toward the purchase of our warehouse and office building. The third installment due on July 1, 2002 will be sufficient to purchase the building on August 1, 2002 as directed by the Legislature. Profits and distributions will increase as a result of the annual rent savings. The purchase will save approximately $3.3 million over the remaining life of the lease. A new store was opened in the City of Eagle during the past fiscal year to bring our total to 155 stores. Growth and urban sprawl in Ada County continues to increase demands for service in certain areas. Demographics show the need for additional stores in Boise and Merid- ian in the near future in order to insure customer service in areas which are underserved. I thank Governor Kempthorne and his staff for their support. I thank the Legislature for its continued support. It is a privilege for me to be associated with a dedicated team of employees who work very hard to accomplish the mission of the Dispen- sary. My sincere gratitude and warm wishes are extended to them. Very Truly Yours, Dyke Nally, Superintendent 3 Idaho State Liquor Dispensary Organization Structure/ Liquor Store Locations Governor Superintendent ● ● Chief Financial Officer ● ● Sandpoint ● ● ●● ● ● ● ● Procurement and District 1 ● Distribution 19 State Stores ●● ● 36 Contract Stores ●● ● Coeur d'Alene ● ● ● Kellogg ● ● ● ● Accounting ● District 2 15 State Stores ● ● 35 Contract Stores ● ● ● ● Information Moscow Technology ● ● ● Orofino ●● ● Lewiston District 3 ● ● ● ● Administrative ● Support & 17 State Stores ● 33 Contract Stores Grangeville ● Human Resources ● ● ● ● Store Location Salmon ● ● ● McCall ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●● ● ● Ketchum ● ● ● ●Caldwell ● ●●● Boise ● ● ● ● ●● ● ● ● ● Nampa ●Hailey ● ● ● ● ● Idaho Falls ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●Pocatello ● ● ● ● ● ● ● ● ● ● ● ●● ● ● ● Twin Falls ● ● ● ● ● ● ● 4 2001 Annual Report United States and Idaho Apparent Per Capita Consumption of Distilled Spirits ■ U.S. ■ Idaho ■ Open States ■ Control States 1.8 1.6 1.50 1.4 1.37 1.39 1.32 1.32 1.28 1.31 1.24 1.25 1.24 1.23 1.25 1.2 1.11 1.07 1.05 1.06 1.04 1.01 1 1.00 .97 .97 .99 1.00 .97 0.8 0.6 Gallons Per capita Gallons 0.4 0.2 0 1990 91 92 93 94 95 96 97 98 99 2000 2000 Open and Control Calendar Year State Consumption Source: Distilled Spirits Council Of The United States Apparent per capita consumption is based on total population and not adults 21 and over. Statistics are based on point of sale and do not take into account cross-border traffic in distilled spirits. Consumption in Idaho was 0.97 gallons in 2000 compared with 1.11 gallons for all control states and 1.32 gallons in open states. Consumption in open states is 19% more than in all control states and 36% more than in Idaho. 5 Idaho State Liquor Dispensary Profit Distribution Counties $4,799,560 23.7% General Fund $4,945,000 24.4% Public Schools $1,200,000 Cities 5.9% $7,199,340 35.5% Alcohol Treatment $1,200,000 5.9% Cooperative Welfare Fund $650,000 Community 3.2% Colleges $300,000 1.5% FY 2001 Total Distribution $20,293,900 Statutory Profit Distribution Formula: Annual fixed distributions totaling $8,295,000 to General Fund, Public Schools, Alcohol Treatment Fund, Cooperative Welfare Fund and Community Colleges. Remainder of profits distributed as follows: • 40% to counties in proportion to sales in each county. • 60% to cities as follows: • 90% to those incorporated cities with liquor stores in proportion to sales. • 10% to those incorporated cities without liquor stores in proportion to population. 6 2001 Annual Report Retail Price Components Retail Price $10.95 Sales Tax $.52 Markup & Handling $4.72 Federal Alcohol Tax $2.16 Product Cost $3.55 7 Idaho State Liquor Dispensary Five Year Bottle Sales Comparison 7.0 6.5 6.0 5.5 5.0 4.5 Bottles (Millions) Bottles 4.0 3.5 3.0 2.5 1997 1998 1999 2000 2001 Fiscal Year Bottle sales increased 11.5% from 5.4 million in 1997 to 6.1 million in 2001. Bottle sales are projected to increase another 13% over the next five years, reaching 6.8 million by 2006. 8 2001 Annual Report Five Year Gallon Sales Comparison 1.5 1.4 1.3 1.2 1.1 1.0 Gallon Sales (Millions) Sales Gallon 0.9 0.8 0.7 0.6 1997 1998 1999 2000 2001 Fiscal Year Gallon sales increased 8.4% from 1.247 million in 1997 to 1.352 million in 2001. Gallon sales are projected to increase another 10% over the next five years, reaching 1.490 million by 2006. 9 Idaho State Liquor Dispensary Five Year Employee Compensation To Sales Ration comparison 10.0 9.5 9.0 8.5 8.0 7.5 Comp Ratio (Percent) Comp Ratio 7.0 6.5 6.0 5.5 1997 1998 1999 2000 2001 Fiscal Year The ratio of employee compensation to sales dollars improved from 9.0% in 1997 to 8.4% in 2001. This ratio is projected to further improve over the next five years, reaching 8.0% by 2006. This commonly used measure of efficiency is 8.3% nationwide for retail-wholesale businesses of all sizes. For similar sized businesses, the nationwide median compensation to sales ratio is 24%.