Pine State Trading Co. has a large fleet of trucks that it uses to deliver spirits to the more than 640 agency liquor stores throughout the state. Joe Phelan/Kennebec Journal, 2014 file photo
When bidding closed on Maine’s new 10-year liquor contract,Pine State Trading Co.’s victory was all but inevitable.
Pine State, a Gardiner-based business that’s been family-owned since it launched in the 1940s, was the sole bidder on both the administration contract for the distribution of distilled spirits in Maine and a smaller trade marketing contract. It is anticipated to rake in nearly $200 million over the next decade.
With no competition, the state awarded Pine State a tentative contract and then spent months negotiating final terms in closed-door meetings.
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It’s not clear how those negotiations went because the state agency that handles the contract would not discuss details. But experts in government contracting say that having just one bidder on any given proposal can disadvantage state agencies and increases the need for transparency.
Pine State CEO Nicholas Alberding had no way to know whether any other bidders would step up, but said he was unconcerned about being skipped over for the lucrative contract. After all, his company had handled the work for roughly a decade under the previous contract.
“I didn’t spend a lot of time worried about it. I mean, I’m not a worrier that way,” he said on a phone call Wednesday morning.
Alberding said he told his team to act as if there were several other competitive bids when formulating theirs, and argued that the fees Pine State will earn under the new contract “only came in a kick higher than the previous amount.”
The company is now entitled to 7.55% of the state’s spirits sales and what’s known as bailment revenue, which includes handling, storage and other fees – up from 7.2% for nine of the last 10 years. That’s just under a 5% increase in its share, which is itself dependent on liquor sales and other revenue.
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Nicholas Alberding of Pine State Trading. Photo by Ronald C. Simons
Maine law requires the Bureau of Alcoholic Beverages and Lottery Operations, or BABLO, to contract out the operations of the state’s entire spirits business, meaning it can’t simply back away from a bad deal if there’s not another option on the table.
“It stops being very competitive, because now there’s nowhere to go,” said Jessica Tillipman, associate dean for government procurement law at George Washington University’s law school. “When you put all of your eggs in one basket, if they fail you fail.”
In such cases, some said, transparency in the contract procurement and negotiation process becomes even more important.
“Dealing with only a single bidder, contract negotiations are very important and must be transparent,” said Khi Thai, professor emeritus at Florida Atlantic University’s school of public administration.
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Pine State’s previous contract was initially scheduled to expire at the end of June, but it was extended through November to give the company and state time to negotiate specific terms, BABLO spokesperson Sharon Huntley said in September. The contract was ultimately signed Nov. 26.
Huntley would not provide details about the contract negotiations while they were taking place or after they had concluded, including whether there were any sticking points. But she said negotiations spanned a typical amount of time for a contract of this size and complexity.
Huntley also repeatedly denied requests to interview BABLO Director Louis Luchini, who is the administrator of the new contract, and Kirsten Figueroa, commissioner of the Department of Administrative and Financial Services, which oversees the bureau.
“The current model has proven a consistent, dependable revenue source for the state, which was able to pay down the debt service on the revenue bond issued to pay Maine’s hospital debt ahead of schedule early under the last contract period, and now dedicates spirits revenues to the Highway Fund,” Huntley said in a statement. She said the state earned more than $500 million in spirits and related revenue during the last 10 years.
Pine State made more than $120 million from the last decade-long contract, according to a review of the bureau’s annual reports.
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The new contract is estimated to generate nearly $19 million for Pine State each year. But that figure, based on fiscal year 2024, could prove higher if revenue continues to grow.
NO OTHER BIDDERS?
Alberding said he could not speak to why other companies did not bid on the contract, but he noted the complexity of the contract and the high benchmarks for fulfillment, including being available for twice-weekly deliveries across the entire state and having a warehouse within 30 miles of BABLO’s headquarters in Augusta.
“I would suspect that others looked at it … and chose that it wasn’t a good strategy for them,” Alberding said. “It’s an overwhelming task. You’ve got to be able to do this economically, and it’s got to work.”
Alberding said his company has more than 50 trucks on the road on a given day, setting a difficult standard for any newcomer to match. They use that fleet to deliver bottles to Maine’s more than 640 agency liquor stores – retailers approved by the state to sell distilled spirits, which include liquor stores, gas stations and grocers. The contract does not cover beer and wine.
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David Canarie, adjunct professor of business law at the University of Southern Maine and a member of the University of Maine School of Law’s compliance program faculty, said that depending on the industry, having just one provider who can fulfill a contract’s requirements “may just be a fact of life.”
“It’s not inherently a problem,” Canarie said. “So long as we end up through the (request for proposal) process, and the contracting process and oversight process with a contract that works. … But a lot of that involves constant oversight of that contract.”
Under the new contract, Pine State is required to maintain regular communication with BABLO that includes sending monthly tax collection reports and providing the bureau access to its inventory control system. The contract also provides minimum benchmarks for revenue growth that Pine State must achieve, which are reset annually and can trigger amendments to the agreement if missed two years in a row.
“You want to make sure that the person who’s overseeing it from the state has the experience, and the time, and the authority within the state to oversee the relationship in a meaningful way,” Canarie said.
In this case, that person is BABLO director Luchini, who joined the bureau this year – after bidding on the latest contract closed but before negotiations concluded – following a stint as the Small Business Administration’s New England regional advocate and more than a decade in the Maine Legislature.
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Pine State Trading Co. has a large fleet of trucks it uses to deliver spirits to the more than 640 agency liquor stores throughout the state. Joe Phelan/Kennebec Journal, file
Luchini was not available for an interview, Huntley said.
Alberding said BABLO is run by “smart people,” and his company has always had a strong relationship with the bureau’s leadership.
Sen. Craig Hickman, D-Winthrop, chaired the Veterans and Legal Affairs Committee, which oversees the bureau, and has previously criticized BABLO for a lack of transparency in its pricing structures. Hickman declined to speak about its procurement process or its transparency when contacted last week.
Hickman said Pine State is among the state’s strongest contracted partners. He said the company, which is based in his district, employees many of his constituents and seems to treat its workers well while fulfilling its obligations to Maine.
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“They go above and beyond. They just have a good reputation. I’ve never heard a bad thing about them,” Hickman said. “I think they have helped the state make money.”
Indeed, the state’s previous contract with Pine State proved much more lucrative than its predecessor.
From 2004-14, when the Maine Beverage Company oversaw spirits distribution, the state made $189 million in revenue, Huntley said.
“By comparison, the 2014-2024 contract exceeded that amount after just the first four years, and through Year 9 of the contract had generated $502 million for the state of Maine,” Huntley said in an email.
WANING COMPETITION
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More than a decade ago, when the 2014-24 request for proposals was released, two companies put down bids for the administrative contract: Pine State and a now-defunct entity called All Maine Spirits LLC.
David E. Warren, an attorney listed as All Maine Spirits’ registered agent, said the company dissolved after it was passed over for the contract. Warren said he could not recall the full details of the business plan, as “we never got to that stage.”
Warren said he worked with two principal investors to craft the bid, but both died since then.
On the second 2014 contract, which included trade marketing rights, Pine State was up against two competing bids: one from the since-renamed Dirigo Spirit Company and another from marketing group CD+M Communications.
Ford Reiche, the registered agent of Dirigo Spirit, now known as Reiche Company, LLC, declined to speak on the record for this story.
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Duncan Stout, president of CD+M, said that after his company lost its bid for the trade marketing side of the 2014 contract, they partnered with Pine State to help produce marketing materials for the first few years of that contract.
Stout believes Pine State’s sweeping network of trucks, warehouses and laborers won them the 2014 contract.
“I don’t know if there’s anybody else in the state of Maine who has that kind of infrastructure,” Stout said.
But Stout said the two companies parted ways on mutual terms a few years ago.
“We were unhappy to lose our relationship with Pine State. It had to do more with personalities, it had to do more with expectations,” Stout said, though he declined to say what precise issues came up.
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Alberding did not not return a phone call asking for details on his company’s relationship with CD+M.
When the state initially put out its requests for proposals late last year, it offered two contracts: one for administration, which includes warehousing and distribution, and another for trade marketing. But since Pine State was the only company to bid on either project, the two contracts were consolidated into one for 2024-34.
Tillipman, the GW Law associate dean, said that consolidation can improve the efficiency of certain government contracts, but she cautioned that over-consolidation can stifle competition by discouraging companies that may be able to perform only some of the work from applying.
Consolidated contracts are relatively rarely split apart later, she said.
“It’s easier for people to do what they’ve always done. There’s kind of this inertia that comes with the procurement process,” Tillipman said. “Once it goes a certain way it tends to be that way.”
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Still, it’s far too early to tell how the next decade will play out or how the state will approach procuring the 2034 liquor contract.
When asked how the state aims to keep the procurement process competitive, and whether the state has any plans to try and attract new bidders, Huntley said the “spirits landscape is likely to change significantly over the course of the next 10 years.”
“Prior to the expiration of this contract, BABLO will aim to keep the process competitive by adjusting to industry shifts, consumer expectations, and the state’s interests,” she said.
Snowfall is nothing new in Maine, but usually it’s white.
The east Maine town of Rumford experienced a rare weather event Tuesday in the form of brown snow, town officials confirmed on Facebook. A malfunction at a paper mill caused the release of spent black liquor, which sparked the bizarre coloring.
Officials warned residents not to touch the substance after initially saying some of the snow measured a pH level of 10, making the substance an alkali and a skin irritant. The Maine Department of Environmental Protection later tested the tan colored snow and found pH levels of “8 or lower,” the city said.
Black liquor is a by-product of the paper production process, according to the U.S. Energy Information Administration.
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Photos captured the brown-looking snow spread across an open sports field.
The town said the mill has agreed to cover costs of third party testing of the snow.
Is the brown snow safe?
Although brown snow in Rumford, Maine is considered non-toxic, the state’s Department of Environmental Protection recommend avoiding contact with skin.
“We are confident that the public safety concerns are minimal at this time. In the meantime out of an abundance of caution please avoid ingesting or direct skin contact with the brown snow,” Rumford officials wrote on Facebook.
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Town officials planned to notify the local school district inform children not to play with the brown snow, and recommended pet owners keep their animals away from it as well.
A rainy Wednesday in Rumford was expected to flush the substance off the ground and resident’s homes, the town’s Facebook page wrote. Any concerns relating to the brown snow can be addressed at the town manager’s office.
The Maine board that oversees doctors has cleared a surgeon from MaineGeneral Medical Center in Augusta of nearly every allegation of unprofessional behavior against him, closing an inquiry into the doctor’s conduct that has largely centered on his treatment of women.
The Maine Board of Licensure in Medicine, which is primarily made up of doctors, voted on Tuesday that Dr. Ian Reight had only violated one of the 16 counts against him. It found that he had acted unethically when he made an inappropriate sexual comment in front of a nurse who had also been his patient, prompting her to find a different physician.
The board imposed a year-long term of probation on his Maine license that will require him to pay up to $3,000 toward the cost of the disciplinary hearing. He will also be required to continue to meet with a professional mentor, something he said he has been doing since becoming aware of the extensive board complaint against him.
His coaching appeared to factor into the board’s reluctance to impose harsher disciplinary sanctions. One board member, Gregory Jamison, asked if the board had to call the discipline “probation” at all because it sounded too “pejorative.”
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Reight, who has denied the allegations against him and continued to defend himself in testimony on Tuesday, will have the opportunity to appeal the decision when it becomes final during the board’s next meeting.
However, Reight plans to leave his position at MaineGeneral soon and does not plan to practice in Maine, he said. The press coverage of his conduct and the complaint against him “has done a pretty good job at making sure I can’t do that,” he said Tuesday.
Reight was the subject of an investigation by the Bangor Daily News in 2022 that found he rose to a leadership position at MaineGeneral despite at least five women submitting complaints about him to hospital officials. He stepped down as president of medical staff and the hospital’s board of directors in November 2022, shortly after publication.
Several of Reight’s former colleagues complained to the licensing board, which began holding an adjudicatory hearing this summer, into whether to discipline the doctor, an action that could have involved anything from a reprimand to revoking his license to practice in Maine. The hearing was held over individual days each month.
The original complaint included 15 counts related to sexual harassment, bullying and demeaning behavior, and concerns about patient safety. In August, the board dropped the patient safety counts.
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Then, last month, the board added an additional count against Reight when a former social worker at the hospital brought forward allegations after reading about the hearing in a news story. That count ended up being the only allegation of unethical misconduct that the board found violated professional licensing rules.
During a hearing in November, the social worker testified that she saw Reight crawl on the floor toward a nurse until he was near her crotch in 2016; then he described how long he could hold his breath. The social worker reported what she saw to hospital officials.
The nurse, who also testified last month, said she had been embarrassed and did not report the incident because she was already dealing with the stress of a breast cancer diagnosis. In addition to working together, Reight had also been her surgeon. The nurse described how he called her later to ask if she had reported him. She then switched to a different surgeon for her medical care.
Members of the board noted on Tuesday that, unlike some of the other allegations against Reight, he did not deny that he made the comment, and it had a clear negative impact on the nurse. The board found he violated “a standard of professional behavior” that was likely to “interfere with the delivery of care.”
“I think this was a serious violation professionally,” said board member Dr. Renee Fay-LeBlanc. “I don’t think Dr. Reight intended that. I think he’s been honest and has problems with boundaries and thinks he’s being funny, but I think this is pretty significant.”
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Reight addressed the allegation for the first time during his testimony on Tuesday. While he denied ever crawling on the floor, he characterized the comment as a joke made in poor taste with a person he considered a friend who enjoyed “salty” banter. He did not mean to upset her and expressed dismay at the offense he caused, he said.
Reight, 52, spent much of his testimony on Tuesday expressing regret for how he hadn’t learned to separate personal and professional boundaries. He struggled to do so at MaineGeneral when the social dynamics within his tight-knit surgery group began to break down and grew “toxic” in March 2020, he said.
But he denied specific allegations related to demeaning or inappropriate comments he made to colleagues or about patients, claiming he was not a person who would speak that way. For instance, he said he did not compare someone’s appearance to that of a chemo patient, noting his own mother’s battle with cancer. He also did not speak to a female colleague in a disparaging way when he expressed concerns about her qualifications to perform a job during a surgery.
He described his unlikely path to medicine that began with a difficult childhood in the Washington D.C. area, dropping out of high school and becoming a firefighter and emergency medical technician. He never truly shed the “firehouse” camaraderie that blurred the lines between personal and professional relationships — something he realized was a “theme” among complaints, he said.
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Reight has since attended professional development courses, he said. He has also met regularly with a therapist and with two doctors who served as professional mentors, one of whom recently defended him before the board. One of the most helpful lessons he took from those meetings is a greater understanding of women’s perceptions, he said.
“It helped me have empathy,” Reight told the board.
Board members credited that work when discussing the terms of his probation on Tuesday. They also asked him why he took those steps if he denied any wrongdoing.
The surgeon said he took advantage of the opportunities for self-improvement.
“In surgery, you’re always trying to make someone better, and I wanted to be better,” he said.
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Fighting back tears, he said the allegations against him in the 2021 board complaint “were horrifying to me” and made him question who he was as a person and a surgeon.
He called the public airing of those complaints, both in the BDN and in the public disciplinary hearings, “devastating.”
Inches of brown snow coated a small Maine town on Tuesday, sending locals into outrage, leaving them only to speculate as to what caused the discolored precipitation.
Flurries of brownish-tan snow fell in Rumford on Tuesday morning, creating widespread concern from locals before town officials claimed the discolored flakes were a result of a malfunction at the nearby ND Paper Mill.
‘It’s everywhere,’ Rumford business owner, Bonnie Datchell, said.
‘Very dirty snow! Looks like the snow does in the springtime, though actually, it’s kind of like a reddish-brownish color.’
Datchell, who owns a restaurant in Rumford less than two miles away from the mill, added that the snow did not have an odor to it.
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A malfunction at the century-old paper mill caused an emission of spent black liquor into the atmosphere that in turn caused the falling precipitation to turn the muted color.
The brown-toned emission has since been reported as non-toxic but can cause skin irritation as it has a pH level of 10.
‘Although it is non-toxic it should not be touched or otherwise put in contact with skin,’ the town said in a statement.
Inches of brown snow coated a small Maine town on Tuesday, sending locals into outrage, leaving them only to speculate as to what caused the discolored precipitation
A coating of brownish-tan colored snow can be seen in stark contrast to the trekked through white snow lying underneath Tuesday morning’s ‘fresh’ coat
Black liquor is a waste product from the paper-making process that has multiple uses in a paper mill, including producing heat, steam, electricity and gasification.
The slightly cocoa colored snow could only been seen from a small area surrounding the mill, on nearby Falmouth, Cumberland and Waldo streets, the town said.
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Maine’s Department of Environmental Preservation has since been on the case, testing the brown snow.
In a later update posted to the Town of Rumford’s Facebook page, the town said the mill has ‘agreed to pay for third party testing’ of the discolored snowfall.
‘Based on guidance from DEP we are confident that the public safety concerns are minimal at this time. In the meantime out of an abundance of caution please avoid ingesting or direct skin contact with the brown snow,’ the afternoon update read.
A malfunction at the century-old paper ND Paper Mill caused an emission of spent black liquor into the atmosphere that in turn caused the falling precipitation to turn the muted color
In light of the worrisome precipitation, the town urged residents to avoid contact with the colored snow, not to let pets out or near it and have notified neighboring school districts not to let children play with the ‘brown snow.’
The town has since stated it hopes that Wednesday’s predicted rain will wash away most of the black liquor.
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‘We are hopeful the rain tomorrow will wash most of the substance away and flush it off the ground and people’s homes or property,’ the town’s statement read.
However, concerns have been raised as few are worried that much of the snow runoff will likely end up in the Androscoggin River.
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Outrage as Maine town is covered with brown snow
