Kotzebue experiments with liquor sales to gain control of alcohol abuse

ANCHORAGE — One Alaska town in a region long wracked by alcohol abuse and the ills that come with it is meeting the problem head-on — with a city-owned liquor store and distribution center being closely watched by other communities looking for solutions of their own.


The largely Inupiat Eskimo town of Kotzebue north of the Arctic Circle launched its tightly controlled experiment last summer after years of allowing only the laxly monitored importation of alcohol, which residents would pick up at the airport. Locals say it’s too soon to give the new system a definitive grade, but they add that fears of a town awash in booze have not materialized. They’ve seen no significant rise in crimes and some categories have even gone down in the community of 3,200. Anyone abusing the system risks losing the annual city permits required to shop at the Kotzebue Package Store, which also sells temporary permits to town visitors.

“I think that we are getting a handle on the alcohol that’s coming into the community,” said City Attorney Joe Evans.

The old system made it easier for unscrupulous smugglers to supply alcohol at a huge profit to minors as well as residents of Native communities where the sale, and sometimes the possession, of alcohol are prohibited as communities struggle to counter the terrible toll alcohol has taken in Alaska, particularly among Alaska Natives.

Alaska Natives have a high rate of suicide and premature death, and alcohol has long been considered a major factor.

But alcohol can still be found even in so-called dry communities, where a fifth of hard liquor that costs about $20 at the Kotzebue store can command as much as $300.

To combat the problem, the new Kotzebue rules allow permit-holders to buy no more than one bottle of distilled spirits on each of the six days a week the store is open, while limits are higher for beer and wine.

The monthly importation cap for hard liquor had been 14 bottles, but recently was slashed to six after certain people were tapping out their daily and monthly maximums, meaning they either were bootlegging or drowning in abuse. Such tweaks are ongoing as the seven-member local beverage control board and others gauge the impact of the store, which also houses the distribution center.

Shirley Gifford, director of the state’s Alcoholic Beverage Control Board, said she knows of no other local-option community that has gone through such a rigorous process as Kotzebue.

“I’ve not seen anything to that detail,” she said.

The local beverage control board, whose members are appointed by the Kotzebue City Council, put a lot of thought into creating a mechanism with maximum local control since a ballot measure was passed by 53 percent of the vote in 2009 authorizing the city to open the store, and, potentially a bar and restaurant in the future.

“When we went into this, we just kind of gave it our best shot because it hadn’t been done before,” Board chairman Lewis Pagel said. “We started from scratch.”

Because the potential for smuggling remains, officials are trying to figure out a way to mark bottles to track them to the buyers if they should end up in someone else’s possession, even in another village, said store manager Tryson Ferguson, who meets regularly with the beverage control board. Each permit carries a personal code, so being able to identify buyers would be a good incentive to follow the rules, according to Ferguson.

“Right now, we can track who they go to in the store,” he said. “What we want to be able to do is also track it after it leaves the store, and hopefully, just by doing that we’ll offset some of the bootlegging as well.”

Although the store is undeniably popular, some residents complain that its merchandise is too expensive, said Karen Hadley, manager of the local volunteer fire department and a coffee shop it owns. Hadley said she’s shopped there only a few times.

“I don’t believe in spending that kind of money,” she said.

Kotzebue police said it’s too soon to know the effect on crimes and other problems. Police Chief Craig Moates said statistics fluctuate. For example, there have been fewer fights — 65 — since around the time the store opened, compared to the 72 fights during the same period previously. Disturbances have slightly increased, from 192 to 198.

Also too early to say is how lucrative the store will be. Sales are robust, but officials say the city also has huge overhead, particularly in the astronomical cost of shipping alcohol to the community, which is 550 miles northwest of Anchorage.

Despite unknowns, the system is gaining attention among other Alaska communities, including Barrow, the nation’s northernmost town that is considered “damp,” allowing the possession, but not the sales of alcohol. The northwest village of Kiana opened a distribution center in January and voters in the community of 380 also approved creation of a city-operated liquor store like the one in Kotzebue.

Barrow, with a population of about 4,200, has a distribution center, but is looking to start a store similar to the one in Kotzebue. Barrow officials traveled to Kotzebue earlier this year to learn more about the store, said Barrow City Council member Mike Shults, who is spearheading a ballot initiative for a city controlled liquor store that’s expected to go to voters in the fall.


  • Switchboard: 907-586-3740
  • Circulation and Delivery: 907-586-3740
  • Newsroom Fax: 907-586-9097
  • Business Fax: 907-586-9097
  • Accounts Receivable: 907-523-2230
  • View the Staff Directory
  • or Send feedback