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November 8, 2011 in City, Region
Liquor initiative passes with widespread support
Washington Restaurant Association government affairs head Bruce Beckett speaks at an election night news conference for Yes on 1183, Tuesday, Nov. 8, 2011, in Seattle. Washington voters on Tuesday approved a plan to privatize liquor sales and dismantle controls that have been in place since Prohibition, siding with retailing giant Costco in the costliest initiative campaign in state history. Unofficial results Tuesday night showed the measure with 60 percent support in early returns.
(Full-size photo)
Washington voters have approved a plan to privatize liquor sales and dismantle controls that have been in place since Prohibition, siding with retailing giant Costco in the costliest initiative campaign in state history.
Unofficial results Tuesday night showed the measure with 60 percent support in early returns. Costco Wholesale Corp. had committed $22 million to supporting the measure — $6 for every registered voter — as executives portrayed the Issaquah-based company as a crusader for consumers and said that it could take years to make up the investment in the initiative.
Wholesalers provided much of the opposition funding, as retailers will now be able to bypass them and buy product directly from producers. The new rules go into effect in June, and about 1,000 people who currently operate the state’s system will lose their jobs.
Costco had backed another privatization measure that failed last year with 47 percent of the vote. Acknowledging that the 2010 proposal wasn’t ideal, supporters returned this year with a plan that includes more revenue for state and local governments, as well as stricter controls on which stores can sell liquor.
The measure will end Washington’s state-run liquor system, which was formed in the 1930s in the aftermath of Prohibition, and allow stores larger than 10,000 square feet to sell liquor. Opponents pointed to an exemption in the law that could allow smaller stores to sell liquor if there are no other outlets in a trade area.
Leading Democrats, including Gov. Chris Gregoire, opposed the measure because of concerns about the consequences of expanding access to liquor.
It’s not clear whether the measure will lead to lower liquor prices. That will depend on how much distributors and retailers mark up their prices, according to a state analysis.
If distributors and retailers combine to mark up liquor by about 25 percent, that would put prices on par with current ones. The state projects that markups could be as high as 45 percent while initiative supporters believe that is unrealistic because of the competition the measure will create.
The new rules allowing retailers to buy directly from distilleries could also push prices down.
Initiative 1183 did have a broad coalition of support, drawing praise from restaurants, retailers, groceries and family wineries. Despite this, Costco was the primary funding source, with the next largest donors — Safeway and Trader Joe’s — giving just $50,000.
The spending was the largest ever from one donor in Washington, but it wasn’t unprecedented in U.S. initiative campaigns: Last year, Pacific Gas & Electric spent $46 million in its failed bid to curb the expansion of public power cooperatives in California.
© Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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johnclarke on November 08 at 8:36 p.m.
Finally, common sense wins.
crazyivan44 on November 08 at 8:41 p.m.
WOOHOO!! Let’s make Idaho next!
Shadedmuse on November 08 at 8:42 p.m.
Asotin and garfield are the only No Counties, is it because those people in Clarkston can cross a bridge and get cheap booze in Lewiston? this makes them Hypocrites.
the No campain was a campain of lies and falsehoods. and deserve to loose.
BlondeSquawker on November 08 at 9:01 p.m.
Oh, Shade, where in L-town is there cheap booze? Please let us in on this little secret.
Shadedmuse on November 08 at 9:05 p.m.
Booze taxes in Idaho as of Now are less then Washington state, with this intitive the 52 percent markup goes away.
mdriftmeyer on November 08 at 9:28 p.m.
A new 27%Q markup is added plus the markup by the Business for Profit.
You think you’ll get cheap booze? If I’m running a business I’m maximizing my profits.
With a minimum required 10,000 sq ft dedicated to sell liquor the number of places with that open space will be large box retailers who will mark up the booze as much as they can get away with it.
Enjoy.
I could get all kinds of booze in Cali. It still cost more at a Safeway equivalent big box than Washington State at a liquor store.
Shadedmuse on November 08 at 9:54 p.m.
The 27 percent tax REPLACES the 52 Percent Markup, so instead of paying 52 percent you only pay 27 percent so taxes go down.
Lewis on November 08 at 9:56 p.m.
alright more state employees lose their cushy jobs, enjoy unemployment suckers!
zelda on November 08 at 9:58 p.m.
@mdriftmeyer — You said “With a minimum required 10,000 sq ft dedicated to sell liquor the number of places with that open space will be large box retailers who will mark up the booze as much as they can get away with it.”
That’s not really what will happen because the initiative was so vague on the definition of “trade areas.” The real battle is going to go to the state liquor board and courts to precisely define what is meant by trade area. Costco will fight to have “trade area” defined as 40 miles while lobbying groups for smaller retailers will want the area to be small enough to benefit them. More funs and games and $$$ to come.
mauijim on November 08 at 10:03 p.m.
Do you have a job Lewis? How would you like to loose it. Have some sensitivity jerk..
Shadedmuse on November 08 at 10:05 p.m.
Washington states Minimum Wage law was also a Voter driffen intivitive that past by a wide margin just like the booze initivitive is passing so you can say these Inititves are like the gift that keeps on giving, 12 years from Now.
estatetracker on November 08 at 10:14 p.m.
This initiative reminds me of when Bill Gates Sr. supported a bill that would have required the rich (like him and Bill Gates Jr.) to pay more WA State taxes than the poor. That initiative was defeated, and now with this piece of law, more profits will be shifted to multi-national corporations that otherwise would have gone to the State of Washington.
At the same time the alchohol privatization bill was being pushed, I have been watching protest accross the nation—and now internationally—regarding the division of wealth, and the protest are becoming more violent. Normal folk are getting beat bloody, drug down steets, and jailed for protesting in favor of the poor.
Shift back to the failure of Gates Initiative, and now this booze bill—the voters consistantly have been choosing to give more and more to the rich and huge corporations. It is as if Its no longer enough that big business eats the little fish, they want to extract the last remnents of profit from the government.
Wow—
To repeat an addage from the 60’s—the times are ripe for the campuses to burn.
RedCedar on November 08 at 10:29 p.m.
Here’s to two-buck Chuck! Clink.
greenlibertarian on November 08 at 10:45 p.m.
RedCedar on November 08 at 10:29 p.m.
Here’s to two-buck Chuck! Clink
You are usually loquacious with well-developed thoughts.
I’m quite disappointed.
Pretty sure the initiative only affected Liquor (and Spirits (and Ghosts, oh my)) pricing, not wine and beer. I might be wrong.
david on November 08 at 10:57 p.m.
Lewis’s hate filled comment is becoming too familiar.. For the employees who will lose their jobs, may you find new ones. For the residents of the state of Washington, good luck making up the $360 million per year that will be lost from the general fund.
another_perspective on November 08 at 11:13 p.m.
I dont think anyone knows how this is going to shake out. The law is one thing, how its going to be applied will be another.
The state liquor employees had living wage jobs funded by the higher priced booze. What happens to them and their families? Probably get jobs in private industry managing the liquor stores.
Idaho will always be there as NV and CA if you want to make those long distance trips.
The writers of these laws should include a sunshine review clause in the event they dont turn out the way the voters expected.
I think a free marketplace was/is the best way to go and the State should have had its strangle hold pried loose a long time ago.
Now if we just had a bottle deposit law we could keep all the liquor bottles out of the ditch.
Cheers.
estatetracker on November 09 at 2:08 a.m.
To Another Perspective - you started out above by stating something to the effect that no one knows the affects of what the law will change until it is up and running.
Do you really think that Costco, and the other, combined billion-dollar think-tank marketing arms were playing poker? The real benefactors of the Initiative know exactly what the law would mean to their bottom-line. Watch Costco stock for verificationn of than one.
Some, or most voters believe the last time they tried a similar initiative, it failed so the new proposal must be better, therefore, close enough—I’ll vote in the opposite direction of government control.
In reality and practice when dealing with the enormous amount of cash generated from liquer sales, the last attempt to privatize was no more than a run up the flag pole. Or in other words, a tact to pacify the reluctant, appease the middle, and out stay (and spend) the hard liners.
What the vote ultimately decided? Most voters would rather THINK they might be able to get a pint of R&R for 50-cents less at Walmart in the short-term without regard to the long-term effects. How sad our appitite.
UWhuskytskeet on November 09 at 6:45 a.m.
David -
The taxes remain the same, and the selling of inventory and licenses to sell liquor are expected to bring an additional $80 million a year in state revenue. Feel free to share a link that says otherwise. The notion that the state will lose $360 million a year from the lack of markup (again, the same taxes remain) is beyond laughable. I pray that you do not have offspring.
The people that are losing (seriously, one “o” people) their jobs should easily be hired in the new independently-ran liquor stores. Just don’t expect a publicly funded pension, and four weeks of vacation. You are a cashier.
bdr on November 09 at 7:29 a.m.
Wave bye bye to slow selling product……..!
Now you’ll have to travel to another state to buy that specialty rum, or whiskey or you’ll have to order it online.
The state run stores had more variety but now that’s all going to change, Retailers have limited space and therefore will only order fast selling product to maximize their profits.
fishinjay on November 09 at 7:56 a.m.
Funny. When I lived in Arizona and California I had more variety stitting on the shelves without ever having to special order. Between BevMo and other large warehouse stores I could find just about anything I wanted. Experience in states without state-run liqour stores has taught me that the “lack of variety” argument just doesn’t hold water.
david on November 09 at 8:20 a.m.
For the uw husky, the $360 million was the profit from running the stores. That profit will now go to costco and the large stores. For the person that lived in Arizona. I’m here now and there are no pints or minitures to be found.
RedCedar on November 09 at 8:35 a.m.
Greeny, sorry to disappoint you this time. This is like explaining a joke, but here goes: Trader Joe’s was one of the big donors to the campaign, though still far behind Costco. The cheap wine that they sell in California as “2 buck Chuck” (Charles Shaw) costs $3 in Washington. Their explanation for the difference is the legally-required distribution system in Washington in which a retailer is not allowed to buy directly from a producer. That is one of the things that will be done away with thanks to this change in the law.
Still not as long-winded as I usually am but I hope it will suffice.
fishinjay on November 09 at 8:39 a.m.
Because of the diversity of stores able to sell liqour in Arizona, most of the larger stores don’t sell mini’s or pints. But the gas stations and convenience stores do.
decturkey on November 10 at 2:52 p.m.
http://liq.wa.gov/about/annual-report
Here’s a little reading for everyone. Check out the Annual Report for 2010. I’m having a hard time understanding how their Sales can be $870.77million and total costs of goods sold be $387.99million and reconciling that with the “components of the bottle diagram” showing how much the markup is and how much tax is charged. If you do the math the total liquor sales was 224% higher than the Cost of Goods Sold. Something doesn’t add up at all.