December 23, 2012 in City, Idaho

Idaho stores swimming in sales since Wash. privatized liquor

By The Spokesman-Review
 
Kathy Plonka photoBuy this photo

A patron nears the entrance of the state liquor store in State Line, Idaho, recently. Idaho has seen a boost in sales from Washingtonians since privatization.
(Full-size photo)

In the first seven months of Washington’s privatized liquor system, the big winner may be Idaho.

Business from Washington already was brisk in Idaho stores before Washington voters’ decision, with the backing of Costco and other retailers, in November 2011 to privatize sales.

Idaho stores boomed after Washington state-run stores closed at the end of May.

This November, sales were up 40 percent from a year earlier at a store in Moscow, Idaho, said Jeff Anderson, director of the Idaho State Liquor Division. Sales are up 40 percent since July 1 at the Post Falls store. The store became so busy that the state opened a new one in State Line to relieve pressure from Post Falls.

With the popularity of Idaho’s stores, we’ve taken a look at prices in both systems to try to answer some questions about the change.

How have prices in Washington changed?

They are definitely up. But there are also deals to be had. Even at stores where prices are generally high, some items cost less. The state Department of Revenue says the average price of a liter of liquor, including tax, was $24.06 in October, the most recent month of available data. That’s up from $21.59 a year earlier. Prices, however, are down from the first month of privatization, when the average liter cost $25.35.

Is it better to buy my booze in Idaho?

Well, if cost is your highest concern and you are replenishing a whole liquor cabinet, probably – especially if your taste is diverse. If you live in Greenacres, you might as well, because it might be the closest place to buy liquor anyway. If you live in Cheney, it may not be worth the gas.

Some retailers with better selection, like Total Wine, aren’t too far from Idaho’s prices. Costco prices are better right now than Idaho’s, but its selection is limited if you don’t want to buy enormous bottles. The new Wal-Mart on Sprague in western Spokane Valley is advertising that its prices are currently only 1 cent above its costs. Those prices beat Idaho’s, too. But not all Wal-Mart locations are having that sale, and Wal-Mart’s selection is greater than Costco’s but less than many stores.

Why are prices up?

Well, don’t say nobody told you so, because the voter’s pamphlet that the state mailed to your home before the November 2011 election said so.

Part of the reason for the increase is that the proposal was designed to prevent the state from losing money after it lost its monopoly. Essentially, that means stores have to find a way to squeak out a profit even after the state gets the same cut.

“It’s just not possible to do both and have prices do anything but go up, at least in the near term,” said Anderson, of the Idaho State Liquor Division.

Larger stores and chains can sometimes make it work because of the huge volumes they buy. They also can handle slimmer profits than small stores because they sell so many other goods.

Why don’t stores include taxes on the shelf price like liquor stores used to?

The law doesn’t require them to do so. Many small stores do list the total price on their shelves, as do a few larger retailers, like Costco and Total Wine.

How much am I taxed for booze?

Even before you paid your taxes, liquor distributors paid a 10 percent fee, which will fall to 5 percent in 2014. Retailers also pay a 17 percent fee on all liquor sales. The taxes customers notice because they’re added at the cash register are a 20.5 percent sales tax and a per-liter tax that equals $2.83 for the standard 750 milliliter bottle or $6.60 for 1.75 liters – the standard larger size.

In Idaho, the shelf price includes a 2 percent tax that’s aimed at fighting substance abuse. A 6 percent tax is added at the cash register.

Are people buying more liquor now that it’s more widely available?

Under the old system, there were 328 stores that sold liquor in Washington. There are now more than 1,500 stores that sell liquor. Even so, in the first five months of privatized liquor sales in Washington, stores sold 12.4 million liters of liquor, down from 13.3 million liters of liquor in the same period a year earlier in the state’s monopolized system.

There are potential reasons for the drop besides increased prices. One is that drinkers in border areas are flocking to other states to buy booze. A bigger reason, more likely, is that people and businesses stocked up on liquor in the final month that state stores were in existence in fear of higher prices, and their stash isn’t yet depleted.

What about the small stores that used to be state stores?

They were auctioned off and have largely experienced a considerable decline in sales. But they tend to have among the best selections and often have knowledgeable staff.

Diane Egger, who bought a former contract liquor store near 57th Avenue and Perry Street, worked at the store for a dozen years before she bought it. She said loyal customers have helped keep her store in business. She said she’s competitive in price with many grocery stores but tries to keep a significantly better selection. Egger, who is married to a co-owner of Egger’s Better Meats and Seafood, takes pride in her selection of Scotch, which she claims to be among the best in town.

“My strategy is to have the sizes and things that the grocery stores and big stores don’t offer,” Egger said. “I just want to keep going as the small, neighborhood liquor store.”


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