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How are Michigan’s minimum liquor prices determined?

Jun 13, 2017

Brittany Riley is the general manager of a liquor store in Kalamazoo. Every three months, she prints out what she calls a "load of price changes" that sometimes seem "incredibly arbitrary."

So, she posed this question to our MI Curious team:

"How does the state come by its minimum liquor prices?"

To answer that question, Andy Deloney, chairman of the Michigan Liquor Control Commission (LCC) joined Stateside today.

"The state of Michigan, since the end of Prohibition in 1933, has been the wholesaler of all distilled spirit products ['hard liquor'] in the state of Michigan..." Deloney said. "The prices are not set by the Liquor Control Commission, per say. It is set essentially by state law."

According to Deloney, when the state buys a bottle of spirits from a vendor, it adds three taxes of 4% each and those dollars go into a variety of funds within the state government. Then, on top of those three taxes, the price is marked up by 65%. 

The change in price comes from the vendor who sells the spirits to the state. The LCC allows for price changes up to four times a year.

Listen to the full interview above for a full explanation, and to learn about the motivation behind minimum prices. You'll also hear how beer and wine factors into the equation.

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