State Auditor releases Municipal Liquor Store Analysis

ST. PAUL — The State Auditor’s Analysis of Municipal Liquor Store Operations released Nov. 7 showed that 45 Minnesota cities reported net losses for 2016; 11 more than 2015.

The 45 cities that reported net losses in 2016 included Tracy ($35,985); Fairfax ($31,226); Butterfield ($17,734); Vesta ($16,029); Walnut Grove ($15,517); Sleepy Eye ($11,848); and Hanska ($6,663).

At the same time, Minnesota’s municipal liquor operations reported a 21st consecutive year of record sales, totaling $344.4 million. Total 2016 sales increased by $7.2 million, or 2.1 percent over 2015, according to the report.

Municipal liquor operations in the Metro Area are considerably larger and more profitable than their Greater Minnesota counterparts, the report read.

Fairfax, which operated an on and off-sale store, reported $263,831 in gross profits in 2016 while operating expenses were $296,227.

Hanska also operates an on and off-sale store. It reported $104,593 in gross profits and $126,094 in operating expenses.

Sleepy Eye, which operated an off-sale store that has since been sold to a local businessman, showed $134,349 in gross profits and $155,453 in operating expenses.

Report recommendations include stores with relatively high operating expenses compared to similarly-sized stores, should prompt city officials to look at stores with low operating expenses for ideas on how they might operate more efficiently.

Area cities showing city liquor store profits in 2016 included Buffalo Lake $1,598; Glencoe $177,315; Granite Falls $128,097; Hutchinson $541,256; Le Center $89,594; Madelia $52,037; Marshall $423,393; Montevideo $45,367; Olivia $47,576; Redwood Falls $130,755; Sacred Heart $11,169; St. James $127,096; Silver Lake $24,656.

The report provides comparative data on municipal liquor store operations owned and operated by Minnesota cities.

For many Greater Minnesota communities, municipal liquor stores provide access and convenience in areas that might be unable to attract a privately-run establishment.

In addition to these functions, profitable municipal liquor operations have provided another source of revenue to supplement traditional tax and fee revenues.

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