Bemidji Municipal Liquor Stores Among State’s Most Profitable in 2023

The state of Minnesota’s 2023 municipal liquor store report was released last month. Bemidji’s Finance Director, Donna Coe, recently presented information about Bemidji’s municipal liquor sales to the Bemidji City Council and how those numbers compare to around the state, showing how the city’s stores is among the most profitable in Minnesota.

The report shows 28 years of consecutive growth, even as the market has evolved numerous times over the years. In 2023, municipal operations saw a total net profit of $31.6 million, a 15.3% increase from 2022. Some may think that number mostly comes from the Twin Cities metro, but the region only accounted for 26% of the profit. The rest came from greater Minnesota, with Bemidji’s revenues being among the top in the state.

“Bemidji is the eighth out of 176 cities in the highest operating revenues, which is the amount of sales, at $8.4 million,” said Coe at the May 5th city council meeting. “We are the seventh out of 176 cities in the highest gross profit margin. Bemidji is ninth out of 176 cities in the highest operating income.”

A big reason for increased sales in the metro area is the addition of THC products. But according to Coe, we won’t see how much profit those products generate for greater Minnesota for a few years.

“It started in the end of November, beginning of December, so we’re not going to see a big impact there; you’ll see a bigger impact in 2025,” she explained.

Profits generated from municipal liquor stores can be used to reduce property tax levies and purchase equipment, such as police cars and fire trucks, or go to any other expenditures cities are authorized to make. Some members of the council argued for that money to be used differently.

“We have a lot of drinkers,” said Audrey Thayer, Bemidji City Councilor At Large. “I’m bringing this to the council just as an opinion that I really feel we are missing the boat in helping nonprofits who are helping with the situation.”

“I also personally believe that we’ve become an enabler in our community where we have strong alcohol and substance abuse issues,” added Ward 2 councilor Josh Peterson. “I feel like a percentage of these funds should be dedicated to recovery programs.”

Coe emphasized the buying power that Bemidji’s municipal liquor stores have, and that due to certain state laws, it might be beneficial for the city to add a third city-run store to the area.

“You could purchase for all three stores, get better buying power so the cost of goods is lower, and then based on that, our profits would be higher,” stated Coe. “But as it is right now, Lakeview Liquor store buys theirs and First City buys theirs.”

But Bemidji Mayor Jorge Prince said that reducing the stores from two to one could be the better option.

“You would look at both as operating profit centers and see what the efficiencies are and see what that looks like, because when you start talking about the improvements, I mean, really what you’re talking about is becoming more efficient,” he said. “Everybody here was talking about three, and in the back of my head, I was wondering, ‘I what this looks like if we had one.'”