State Auditor Blaha Releases 2021 Municipal Liquor Store Report - December 15, 2022

Saint Paul, MN – This morning State Auditor Julie Blaha released the 2021 Analysis of Municipal
Liquor Store Operations report at Marketplace Liquor, a municipal liquor store in Savage, Minnesota. The report provides comparative data on liquor operations owned and operated by Minnesota cities.

“The most striking data point is the historic increase of on-sale operations profit and sales. After struggling during the closures of 2020, Minnesota’s on-sale liquor operations bounced back with a 105 percent increase in profits for 2021,” said State Auditor Blaha. “In addition to strong profit growth, the number of unprofitable on-sale operations declined from 35 in 2020, to just seven in 2021.”

Overall, municipal liquor store profits were up one percent in 2021, with on-sale operations faring much better than off-sale operations. Between 2020 and 2021, the net income of on-sale municipal liquor stores rose 105 percent, while the net income decreased 9 percent for off-sale stores.

State law requires cities whose liquor operations show a net loss in at least two of the past three years hold a public hearing to determine whether to continue liquor operations. Based on 2021 data, 20 cities are required to hold a hearing in 2022 compared to 24 in 2021.

Highlights of the report include:

• The combined net profit of all municipal liquor operations totaled $36.5 million in 2021. This represents an increase of $456,993, or 1.3 percent, over the amount generated in 2020. Among on-sale operations, net profits totaled $6.4 million in 2021, which was an increase of $3.3 million, or 105.0 percent, over 2020. Total net profits for off-sale operations totaled $30.1 million in 2021, which represents a decrease of $2.8 million, or 8.5 percent, from 2020.
• Over the past five years, net profits increased 57.9 percent. Among off-sale operations, there was a 45.1 percent increase in net profits, while on-sale establishments showed an increase of 172.5 percent.
• Thirteen Minnesota cities reported net losses for 2021 (24 fewer than 2020). Twelve of the 13 cities with losses are in Greater Minnesota.
• During 2021, Minnesota’s municipal liquor operations reported a 26th consecutive year of record sales, totaling $423.5 million. Total sales generated in 2021 increased by $12.9 million, or 3.2 percent, over 2020. Among individual liquor operations that were in business for all of 2021, total sales ranged from $98,830 in Elmore to $19.7 million in Lakeville.
• During 2021, Minnesota’s municipal liquor operations reported operating expenses totaling $86.3 million. This represents an increase of $4.9 million, or 6.0 percent, over the amount reported in 2020.
• Municipal liquor operations located within the Metro Area are considerably larger and more profitable than their Greater Minnesota counterparts. Although only 18 of the 177 Minnesota cities (10.2 percent) that own and operate municipal liquor stores are in the Metro Area, they represent 33.5 percent of the total sales and 26.2 percent of the net profits of municipal liquor operations. Sales by all Metro Area municipal liquor operations averaged $3.6 million in 2021, compared to average sales of $1.6 million for all Greater Minnesota operations.
• During 2021, Minnesota’s municipal liquor stores had net transfers (transfers out minus transfers in) of $23.1 million. This represents an increase of 8.3 percent from the total net transfers made in 2020. Net transfers totaled $8.1 million among Metro Area establishments, compared to $15.0 million for Greater Minnesota.

The full report can be accessed on the OSA website.