Third Crossing has gone through recent and costly construction updates. The  liquor store also survived a one-vehicle crash on the eve of Turkey Days in 2022 that damaged the entrance. In 2023, city liquor operations cleared a profit of $31,111.

By Robert Williams

Editor

The Office of the State Auditor Julie Blaha recently released the annual analysis of municipal liquor store operations for 2023. The report provides comparative data on municipal liquor operations owned and operated by Minnesota cities.

Vergas Liquor Store Manager Kyle Theisen took over duties in late 2021 and has managed the store’s annual contributions to the city’s bottom line. In 2023, the store transferred $15,000 to the city’s coffers.

In 2023, 176 Minnesota cities reported operating 210 municipal liquor stores, with 84 cities operating both on-sale and off-sale liquor establishments and 92 cities restricting their municipally-owned establishments to off-sale liquor stores. While the majority of municipally-owned liquor stores are located in Greater Minnesota, 18 cities within the seven county metro area own and operate liquor establishments.

Below is a breakdown of area municipal liquor store performance in 2023.

• Battle Lake – On & Off Sale, Population 903, Sales $2,183,159, Gross Profit $594,452, Expenses $380,373, Net Profit $270,106, Net Transfer $56,000.

• Detroit Lakes – Off Sale, Pop 10,003, Sales 9,305,828, Gross Profit $2,538,582. Expenses $1,193,470, Net Profit $1,385,957, Net Transfers $3,400,083, includes an annual transfer of $579,393 to offset property taxes.

• Fergus Falls – Off Sale, Pop 14,144, Sales $7,487,100, Gross Profit $2,468,628, Expenses $1,291,695. Net Profit $1,252,562, Net Transfer $704,251/

• Frazee – On & Off Sale, Pop 1,318, Sales $612,428, Gross Profit $242,358, Expenses $211,247, Net Profit $31,111, Net Transfer $0.

• Menahga – On & Off Sale, Pop 1,375, Sales $1,200,521, Gross Profit $448,702, Expenses $309,804, Net Profit $65,178, Net Transfer $42,000.

• NY Mills – On & Off Sale, Pop 1,364, Sales $829,477, Gross Profit $312,599, Expenses $272,427, Net Profit $60,788, Net Transfer $38,000.

• Pelican Rapids – Off Sale, Pop 2,564, Sales $1,744,985, Gross Profit $528,321, Expenses $347,881, Net Profit $189,060, Net Transfer $299,712.

• Perham – Off Sale, Pop 3,618, Sales $4,514,485, Gross Profit $1,320,320, Expenses $731,602, Net Profit $701,471, Net Transfer $484,179.

• Sebeka – On & Off Sale, Pop 742, Sales $623,439, Gross Profit $270,088, Expenses $304,210, Loss -$34,122, Net Loss -$34,203.

• Vergas – Off Sale, Pop 341, Sales $873,914, Gross Profit $230,891, Expenses $198,619, Net Profit $33.568, Net Transfer $15,000.

• Wolf Lake – On & Off Sale, Pop 73, Sales $272,410, Gross Profit $126,533, Expenses $160,802, Loss -$34,269, Net Loss -$10,504.

Variances among 

individual operations

Net profits and losses for municipal liquor stores operating as of December 31, 2023, ranged from a net loss of $342,976 in Anoka to a profit of $1.4 million in Richfield. Overall, of the municipal liquor operations that reported in both 2022 and 2023, 100 cities showed year-to-year increases in their net profits, while 76 showed decreases. Of the 76 cities with declines in net profits between 2022 and 2023, 68 were in Greater Minnesota, and eight were in the Metro Area.

Operations losing money

In addition to municipal liquor operations that posted a decline in net profits between 2022 and 2023, 31 Minnesota cities reported net losses for 2023 (one fewer than 2022). Twenty-eight of the 31 cities with losses were located in Greater Minnesota, including Sebeka, Mahnomen, Elizabeth, Underwood and Wolf Lake. Of the 31 cities whose liquor operations had net losses in 2023, 19 were on- sale operations and 12 were off-sale. Table 1 below lists the cities whose liquor operations posted net losses in 2023.

Net losses in 2023

Anoka (342,976) 

Lonsdale (135,729) 

Ivanhoe (108,955) 

Russell (64,864) 

Butterfield (47,473) 

Sherburn (43,665) 

Brooklyn Center (42,671) 

Robbinsdale (39,449) 

Sebeka (34,203) 

Dalton (33,783) 

Buffalo Lake (30,432) 

Boyd (28,286) 

Mahnomen (27,987) 

Holdingford (23,990) 

Palisade (17,682) 

Big Falls (16,349) 

Barnum (15,232)

Underwood (14,214)

Northome (12,876)

West Concord (11,266)

Sacred Heart (11,039)

Wolf Lake (10,504)

Twin Valley (8,686)

Kiester (7,036)

Hanley Falls (5,921)

Eagle Bend (5,086)

Elmore (2,693)

Dawson (1,383)

Ada (1,018)

Elizabeth (1,005)

Okabena (159)

Total sales at municipal

liquor operations

During 2023, Minnesota’s municipal liquor operations reported a 28th consecutive year of record sales, totaling $437.4 million. Total sales generated in 2023 increased by $3.9 million, or 0.9 percent, over 2022. Among individual liquor operations that were in business for all of 2023, total sales ranged from $123,730 in Elmore to $22.7 million in Lakeville.

Transfers

Profits generated by municipal liquor operations generally serve two purposes. First, municipal liquor operations use profits to ensure that they have an adequate level of reserves to purchase inventory and maintain their facilities. Second, profits in excess of what is needed to fulfill the first purpose may be transferred to other city funds to supplement existing revenue sources. During 2023, Minnesota’s municipal liquor stores had net transfers (transfers out minus transfers in) of $28.5 million. This represents an increase of 23.2 percent from the total net transfers made in 2022. Net transfers totaled $8.1 million among Metro Area establishments, compared to $20.4 million for Greater Minnesota establishments.  

On-Sale and Off-Sale

transfers comparison

The overall level of net transfers was larger in Greater Minnesota than the Metro Area. When transfers are examined on a per-establishment basis, the average net transfer for off-sale stores in the Metro Area was more than those in Greater Minnesota ($218,025 to $217,104, respectively). The average net transfer per on-sale establishment was five times greater among operations in the Metro Area than in Greater Minnesota ($146,400 to $29,120, respectively).*

*The Metro Area on-sale average is based on three stores, compared to 90 stores in Greater Minnesota.

On-Sale and Off-Sale 

sales comparison

When broken down by type of operation, the contrasts between Greater Minnesota and Metro Area operations are clear. Off-sale operations in the Metro Area average sales of $3.8 million, compared to $2.7 million in Greater Minnesota. 

Metro Area operations are almost exclusively off-sale operations. Among Metro Area municipal liquor operations, off-sale operations outnumbered on-sale operations 35 to three. Conversely, among Greater Minnesota cities with municipal liquor operations, on-sale operations outnumbered off-sale operations 90 to 82. As with off-sale operations, on-sale operations are much larger in the Metro Area than in Greater Minnesota. Sales per on-sale establishment were almost five times greater in the Metro Area than in Greater Minnesota, $3.9 million to $803,556, respectively. 

To view the entire report or all the raw data visit: www.osa.state.mn.us