Editorial: Board ought to rethink its rule on liquor sales

Folks might need a drink after they go shopping for liquor, because most prices have risen now that Initiative 1183 is the law. The voter-approved measure removed government from the business of selling booze. As of last Friday, hard liquor is now sold at thousands of outlets, including grocery stores and big-box retailers, making that purchase instantly more convenient.

The prices might look cheaper on the shelf, but that’s because the taxes and fees are added at the cash register. When the state ran the stores, the markup was already included in the sticker price. The state’s portion of the price tag shouldn’t be a surprise because they were at the center of why this initiative, as opposed to an earlier version, was adopted by the voters. I-1183 included an assurance that state and local governments, especially in the area of public safety, would not lose revenue.

To help achieve that goal, the initiative said liquor distributors must provide $150 million to the state through 2013 by means of a 10 percent tax on gross receipts. If the tax doesn’t raise that amount, they are still on the hook for it. As a result, prices may not drop much for the first two years.

But if you thought the battle between Costco ($17 million in campaign spending for I-1183) and distributors/wholesalers ($12 million in opposition) was over, you’d be wrong. Over the past few months, Costco and the Washington Restaurant Association have been duking it out with distributors over how the state Liquor Control Board should interpret the section of the initiative limiting retail-to-retail sales. The initiative states, “no single sale may exceed twenty-four liters.”

We doubt many voters spent time pondering what this would mean as they ordered drinks from a bar or restaurant. They probably figured, as we did, that interest of consumers would be paramount because that’s the point of privatization. If it takes multiple sales to fill an order, so be it. But the Liquor Control Board took the side of wholesalers who dominate distribution. It has written a rule to restrict these sales to one transaction per day. So if bars and restaurants need more than 24 liters and can’t wait, they must turn to wholesalers for bulk purchasing.

Costco and the restaurant association supported I-1183, so it’s safe to say they didn’t foresee a time limit. On the other hand, distributors claim that if retailers are allowed to become de facto distributors, then they should pick up their share of the $150 million assessed by the initiative.

It is a mess. But this is what we get when a complex issue is left to two warring factions and a government agency made up of unelected officials. This is precisely why legislators should’ve handled the privatization of alcohol sales. At least when they bungle matters, voters can un-elect them.

The solution won’t be easy, but the state ought to write rules that conform to the intent of the initiative. The voters did not side with the distributors. Thus far, the state has. The Liquor Control Board ought to rethink its rule before the lawsuits begin pouring in.