Learn about Liquor Distribution in Montana

The Department of Revenue's Liquor Distribution Operation manages state wholesale liquor operations, including warehouse shipping and receiving, accounts receivable and payable, inventory management, liquor order processing, agency contract management and customer service. The state maintains franchise contracts with 97 agency stores that sell liquor products to the public for off-premise consumption, and to Montana's 1500 all-beverage licensees. The Liquor Warehouse holds bailed and/or state owned inventories for more than 963 regular list products and more than 1,793 special order products.

Focusing on Customer Service, Public Safety
Our mission is to administer the applicable sections of the Alcoholic Beverage Code (Title 16, Chapters 1 through 6, Montana Code Annotated) with an emphasis on excellence in customer service and a focus on public safety. We strive to ensure a safe, orderly and regulated system for the convenient distribution and responsible consumption of alcoholic beverages.

History of Liquor Distribution in Montana
In 1933, following the repeal of prohibition, the State Board of Examiners established the Montana Liquor Control Board. Patterned after the alcohol beverage distribution system in Alberta, Canada, the Board was charged with the responsibility of purchasing, pricing and vending liquor in the state. By the first quarter of 1935, 115 state-owned retail stores were in operation and in 1937, liquor-by-the-drink became legal. In the mid-1960's, emphasis on customer services brought self-service stores to the state. In 1973, the State Legislature abolished the Liquor Control Board and transferred its responsibilities to the Department of Revenue. In 1995, the State Legislature directed the Department to convert all remaining state liquor stores to privately owned agencies. All agencies now own their liquor inventories and are permitted to set their own retail prices. However, the State establishes prices for liquor sold to licensees and continues to run the wholesale distribution operation.

Montana is a "Control State"
Eighteen states and Maryland's Montgomery County are known as "control jurisdictions." They control the sale of distilled spirits -- and in some cases wine -- through government agencies at the wholesale level. Twelve of those jurisdictions also exercise control over retail sales for off-premises consumption, either through government-operated package stores or designated outlets over which the state supervises a sales agency relationship. The control jurisdictions represent 28% of the nation's population and account for 25% of its sales of distilled spirits.

As a control state, Montana believes that moderation can best be achieved by neither promoting nor encouraging the consumption of alcohol, but by instead controlling it. The purpose of control is to make liquor available to those adults who choose to drink responsibly, but not to promote the sale of liquor. The Department of Revenue's Liquor Distribution supplies liquor to private agencies. These agencies are the exclusive retailers of liquor and fortified wine. The department also administers liquor laws and licenses of on and off-premise businesses, manufacturers, wholesalers, warehouses, importers and liquor representatives.

Benefits of Liquor Distribution Operation to Montanans
The Liquor Distribution operation offers several important benefits to Montana and its citizens. Specifically, Liquor Distribution does the following:

  • Provides a source of revenue to the State of Montana. The state uses these revenues to help fund-state government operations and to support several government programs.
  • Supports alcoholism information programs. Revenues from liquor taxes are distributed each year to cities, towns and counties to be used exclusively for alcohol-related programs and projects for prevention, rehabilitation, detection, prosecution and control.
  • Promotes "moderate" consumption. Control systems promote moderation in consumption. Annual statistical data clearly shows that per capita consumption of alcohol beverages is 25% lower in control states than in the open states.
  • Provides education and enforcement. The control state system continues to provide a regulatory environment that is better able to deter alcohol abuse, including its ever-present risks and costs to the individual and the community. At one level, the uniform enforcement of applicable laws is made far more effective in a control state, where there are ordinarily fewer sales outlets and more importantly, where the economic incentive to violate those laws are greatly reduced. At another level, the control system itself serves both as a visible symbol of the public commitment to moderation and as a vehicle for the promotion of alcohol education and awareness programs to support that commitment.

Fiscal Year 2005 Activity
Fiscal year 2005 represented Liquor Distribution's tenth full year of operation under HB 574. During FY 2004, the State of Montana sold and shipped 505,064 cases which generated gross sales of $70,827,539. During FY 2005, the State of Montana sold and shipped 528,049 cases which generated gross sales of $75,686,673. This represents an increase of 22,985 cases (4.55%) and $4,859,134 (6.86%).