The Department of Revenue’s Steve Swanson, left, gives legislators a tour of the state liquor warehouse. (Keila Szpaller/The Daily Montanan)
Tito’s Handmade Vodka is the most popular liquor in Montana, and Lolo has the busiest liquor store under contract with the state of Montana.
Those are a couple of the things lawmakers who take up bills related to the business of alcohol heard Thursday on a tour of the 100,000 square foot liquor warehouse in Helena that’s managed by the Montana Department of Revenue.
“It’s like a big booze Costco,” said Rep. Scott DeMarois, D-Anaconda, as he walked into the warehouse.
Over the last couple of sessions, the Montana Legislature appropriated $22 million for a 30,000 square foot expansion, and on a walk around the building, Alcohol Beverage Control Division operations officer Steve Swanson gave roughly 12 legislators a tour of the existing warehouse and the new space, expected to be completed by July.
In Montana, the state regulates liquor sales, and the warehouse sells to 95 privately-owned liquor stores. Lolo calls in the largest orders, but that’s because it sells to other businesses too, Swanson said. He said Belgrade is No. 2.
The warehouse keeps roughly $20 million of inventory on hand, although a lot of the product on site is still owned by the supplier until the state buys it, Swanson said. He said that practice keeps overhead down.
In the building, Tito’s isn’t in just one place, it’s placed strategically around the warehouse for easy picking.
Swanson said the state tries to keep six to eight weeks of inventory on hand, and in December, it shipped 110,000 cases of liquor. At the warehouse, 10 full-time workers ship more than 1 million cases every year, with help from some temporary staff.
Sen. Denley Loge, R-St. Regis, asked if the state had ever talked about setting up an additional shop outside Helena, such as in Missoula, but Swanson said suppliers like the ease of planning that comes from having one pickup location.
In one part of the warehouse, a shrink wrapper spun an order around, and Sen. Bruce “Butch” Gillespie, R-Ethridge, aimed his camera at the spinning pallet.
“I’ve sold a lot of feed in my life, and we shrink wrap similar to this,” Gillespie said.
The warehouse processes 20 or so orders a day, and Black Velvet used to be the top seller five or six years ago, Swanson said. He said if an order comes in on a Monday, a driver will pick it up Tuesday, and the shop gets it Wednesday.
Although the warehouse is stacked with pallets and pallets of adult beverages to ship, Swanson said staff also do ordering and product research upstairs, in addition to picking orders on the ground floor.
One legislator wanted to know if earthquakes have caused problems for the stacks of liquor. Swanson said that hasn’t happened, and bottles themselves are “stout,” although a camera has showed them the warehouse in action.
“You could see the boxes doing their shimmy,” Swanson said.
In the new addition, workers were still putting the place together, it looked clean and shiny, and Rep. Joshua Seckinger, D-Bozeman, joked about its purpose.
“Is this a SpaceX facility? Are we assembling rockets in here?” Seckinger said.
CWG Architecture and Dick Anderson Construction are doing the work, which Swanson said is designed to accommodate Montana for the next 20 or 30 years.
He said the new space will use cranes and a conveyor belt to move product, and it will require no forklifts or new staff. The site impressed at least some on the tour.
“Amazing, huh? Just the complexity of it all,” said Rep. Steve Gist, R-Cascade.
Members of legislative committees that take up proposals related to alcohol went on the tour. This session, the House Business and Labor committee already sent House Bill 123, to allow “self-serve alcohol” at places such as wine bars, onto the House.
This week, the House passed that bill 89-11, and it heads to the Senate.
On the tour, Rep. Jonathan Carter, D-Missoula, said Montana has to have a larger conversation about problems that come with alcohol. Carter was the only opponent of the bill in committee.
Montana exceeds the national average of drunk driving fatalities per miles traveled, according to the Department of Transportation.
“When there’s a business that has a downside too, we need to think about how we’re going to mitigate that downside,” Carter said.
At the warehouse, though, Swanson ticked off some upsides, including how clean the staff keep the facility. He said the warehouse does a lot of safety training for staff, it has low worker’s compensation claims, and it has high retention.
“It’s a good job, and vacancies don’t happen very often,” Swanson said.
Rep. Kerri Seekins-Crowe, R-Billings, said staff have been responsive to her constituents, such as people who work at resorts or restaurants and need help.
Swanson also shared the way the dollars flow. The state buys a case for $100 on average, it adds money for shipping, tacks on two taxes and other markups, and roughly doubles the price of the product.
Then, it uses the money from sales to pay the supplier, cover the cost of employees, and put $19 million into the general fund. A portion of the money goes to the Department of Public Health and Human Services for prevention.