July 27, 2012 in City

Border booze business gets boost

Idaho outlets seeing many Washingtonians
By The Spokesman-Review
 
Kathy Plonka photoBuy this photo

“You never know what kind of a markup you’re going to get in the grocery store,” said Joan Carrier, of Otis Orchards, after making a purchase at the Idaho state liquor store in Post Falls on Thursday.
(Full-size photo)

Washington voters probably didn’t intend it, but they gave at least a temporary economic boost to Idaho liquor stores when taking their state out of the booze business last year.

In June, the first month that Initiative 1183 closed Washington’s state-owned liquor stores and raised the overall price of distilled spirits in the private outlets that took their place, Idaho state liquor stores just across the border saw more Evergreen State license plates in their parking lots and a jump in business.

The two Post Falls liquor stores saw a 58 percent sales increase in June compared with June 2011, said Jeff Anderson, director of the Idaho State Liquor Division. The eight liquor stores just across the border, from Lewiston to Oldtown, are up 33 percent overall, a total of $560,000.

“The numbers are a bit skewed,” Anderson said, because liquor sales tend to go up on weekends, and there were five weekends this June compared with four last June. Sales throughout Idaho were up 14 percent because of the difference in the calendars.

Idaho expected to see some short-term increases if I-1183 passed, Anderson said.

Some Washington voters may have thought alcohol prices would go down under the provision they approved, but Idaho officials didn’t. They expected wholesalers and retailers to raise prices to cover taxes and fees.

“Those of us who actually read the proposal and understand the distilled spirits business knew (prices) would go up,” he said. “We didn’t think it would pass.”

Washington doesn’t have revenue figures for June, the first month of private liquor sales. They should be available by early August, said Mike Gowrylow, a spokesman for the state Department of Revenue.

Those numbers might not be typical, he added, because some stores had supply problems at the beginning of the month and smaller stores won’t have to report their revenue for three months.

Even before I-1183, Washington liquor prices were a bit higher because of the difference in taxes.

“We never went to the liquor store in Washington,” said Joan Carrier, of Otis Orchards, who was shopping Thursday at a Post Falls liquor store. The Idaho store was closer and the prices better, she said. Those prices, which are still controlled by the state, haven’t changed, while most Washington prices have gone up.

Carrier said she never made a special trip to Idaho for liquor but would pick up something she needed when she was there for other things.

Washington law that predates I-1183 says a resident can bring two liters of liquor into the state each month for personal use “free of tax and markup.” Washington residents are supposed to pay the added tax and markup on more.

Yet few do. Idaho stores aren’t responsible for collecting it, and Washington doesn’t have the manpower to enforce it, except when it involves large amounts of liquor.

“It’s more of an honor system,” said Gowrylow.

Some tax collection duties shifted from the Liquor Control Board to the Revenue Department because of I-1183, but Revenue staff aren’t sure if the two-liter limit applies to the taxes it oversees. They weren’t even aware of the limit until a reporter asked about it this week.

Idaho officials don’t expect Washington residents to travel long distances to buy their liquor. But if they’re going to Cabela’s anyway or headed to the family lake cabin in North Idaho, the price difference is enough to bring them in, Anderson said.

Idaho hasn’t marked down any products to attract more customers from Washington, and Idaho stores don’t advertise. The state keeps the prices the same in all Idaho stores.

That’s the same policy Washington had before I-1183 took effect. Now retailers can discount whatever they want, whenever they want.

“Once things settle down, it’s hard to predict” how much Idaho sales will increase, Anderson said.


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