Rural Minnesotans head back to taverns as municipal liquor sales set a record

Minnesotans are bellying up to the bar again, as the easing of the pandemic has unleashed a flood of patrons who are drinking at municipally owned taverns, especially in rural areas.

For the 26th straight year, sales at Minnesota's municipally owned bars and liquor stores set a record, according to an annual report released Thursday by State Auditor Julie Blaha.

The state's 212 munis rang up sales of $423.5 million in 2021, a 3.2% increase over 2020.

The biggest gains came in on-sale establishments, meaning liquor stores that also offer a bar for drinking on the premises. Those businesses are largely in rural Minnesota; there are only three on-sale munis in the seven-county metro area.

Muni bars saw profits more than double, up 105% over 2020. Meanwhile, profits at off-sale stores dropped by 8.5%. Revenue at on-sale establishments was up 12.1% over 2020, while revenue at off-sale munis inched up by 1.4%.

"This year really is a study in what comes after the pandemic," Blaha said in a presentation at one of two munis in Savage. "It's our first year where we have data to see what's going to happen coming out of the pandemic."

What happened was Minnesotans began drinking in public again. While liquor sales shot up in 2020, the first full year of the pandemic, the situation in 2021 was just the opposite. In 2020, with many people staying home for fear of catching COVID-19, off-sale profits jumped by more than 35% while on-sale profits were down nearly 12%.

"It's just better," said a bartender at the muni in the Hubbard County city of Nevis, some 180 miles northwest of the Twin Cities. "It's back to what it was before COVID, I would say."

Once again, the statewide leader was Lakeville, where the three munis rang up total sales of $19.7 million. Richfield's four stores brought in more than $13.9 million, Eden Prairie's three rang up sales of more than $11.9 million and Apple Valley's three munis brought in about $11.1 million.

On the other end of the scale, the muni in Elmore, Minn., hometown of Walter Mondale, posted sales of about $99,000.

Munis returned about $23 million to their cities, money that can be used for many community needs. In Savage, muni profits in recent years have helped pay for a new library, a new park and equipment for the Fire Department, said Mayor Janet Williams.

Twenty munis have lost money in at least two of the past three years. Under state law, those cities are required to hold a public hearing to examine liquor store operations. Of the 20 stores, 19 are in rural Minnesota, with Brooklyn Center the lone exception.