James M. "Dyke" Nally has the only state government office with a liquor cabinet prominently displayed in the front lobby. The chief of Idaho's Liquor Dispensary proudly shows off Idaho vodkas and wines at his headquarters near Micron, as well as the state's top-selling liquors (think Captain Morgan rum and Crown Royal bourbon). Nally, whose nickname comes from childhood (his middle name is Michael and his family called him "Michael-Dykel"), runs Idaho's least-understood state entity. In the sprawling warehouse set to expand next year, Nally sits on top of about $6 million of liquor in bottles. Another $6 million worth, he estimates, is out in the state's 160 liquor stores. In fiscal year 2006, his agency sold $110 million worth of liquor statewide, and netted $33.5 million. Find out why Sunday sales of liquor aren't such a big deal, what he thinks about the Alcohol Beverage Control agency, and why it's good to have the state selling booze.
What's it like to run Idaho's liquor supply?
This is basically a $125 million business, operated out of this one warehouse. We have about 40 people that run this business for the whole state, that the taxpayers own.
How did you wind up running this?
I was the director of alumnni relations for Boise State. I graduated in 1969, and went to work the next year. Then, Gov. (Phil) Batt asked me to join his administration. I don't think he planned for me to run this. But, four governors later, I'm still here.
Is it a good idea for Idaho to have control over its liquor supply, rather than the private sector?
One of the benefits of being a monopoly is that the distiller owns the product until it gets to the store and can be sold. Ideally, you sell it before you pay the distiller.
One thing about being a "control" state is, you can manage the supply. We have a special orders department, where we have about 400 to 500 special orders going on at one time. Every town is different. You'd think you could have 10 or 12 bottles of liquor for Yellowpine, and that would be enough. But there's folks with cabins out there, so you need more. We're trying to manage that consumer demand throughout the state. Those 160 stores are all different. People in Ketchum want different liquor than they do in Orofino.
What's the most expensive bottle in the warehouse?
The most expensive bottle we have is a Louis XIII Cognac. It's about $1,300 per bottle. We sell several bottles a year. Most of the sales are in Ketchum, Coeur d'Alene and Boise. It's $50 a shot. We've had some stuff that costs $5,000 per bottle. I'm not able to understand the difference, much.
What's the biggest misconception about your agency?
It's, "Why would the state be in the liquor business?" Just weekly, I'll get that question. People do not understand the control state system. In 1933, with the repeal of Prohibition, the federal government gave states the right to sell liquor or not. Eighteen states and one county in Maryland opted to keep the business for themselves.
There were two thoughts behind it: one, control and regulation of a product that is not an ordinary product. The other was to produce revenue to help pay back, to cover the social costs and fund public programs. Control states clearly have less consumption, which equals less social costs, and more profits. The profits go back to the people, not to an individual or a corporation. It's a form of property tax relief. It's kind of a user fee: The more you consume, the more you pay.
It sounds like more counties, like Ada, are moving toward Sunday sales of liquor.
There are 25 counties, out of the 44, that have it.
What are you guys finding out about Sunday sales?
It sounds like a bigger deal than it is. Alcohol is for sale one way or the other, throughout the state, whether it's beer or wine, on Sunday. Sunday has become the second biggest shopping day in America. Alcohol is already available, in bars, in mixed bottles in the grocery stores, and as beer and wine. Why wouldn't alcohol be available in packaged form, which is primarily taken home to consume? It's really maybe less of a problem than other forms of alcohol for sale.
We don't plan to open all our stores initially. We go by where the demand is, for Sunday sales. We immediately went to our resort areas, to open the first round. Coeur d'Alene, Ketchum, McCall. There are 14 to 15 liquor stores in Boise. We'll probably open three to five of them. Ada County is important, because so many people come in here for tourism and business. Plus, there's been no downside to it; there's been no problem to it; there's been no negative reaction.
What do you make of Gov. C.L. "Butch" Otter's move to have an oversight committee of the Alcohol Beverage Control agency?
The Legislature passes the laws that Alcohol Beverage Control is charged with enforcing. I think some people think that Alcohol Beverage Control just creates their own laws. The committee will clarify the position that ABC and the State Police are in. The committee is well represented, by all the stakeholders. It's a great thing that the governor is doing.
We have one person who has become a household name: Lt. Bob Clements. Washington state, our neighboring state, has 85 Bob Clementses. They do seven times the business that we do. They do that much more business. They take that as pretty important, to have that many more people.
This committee will be a pretty good forum to update the law. A lot of the law is from 1939. They'll update that, and see the direction we need to go to stay in tune with the law but stay in line with the responsible side of things.
If you could change one thing about the state's liquor laws, what would it be?
A real early shot would be a licensing issue. We have a lot of corporate chain restaurants coming into the state. They have to wait in line or pay a hefty fee to be able to pour distilled spirits. A license for beer might cost $50,000. For wine, $100,000. A liquor license could cost you as much as $400,000. But you have to wait on a list until the population expands by 1,500 people, and hope you're next on the list. That will be an interesting one to talk about.