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Liquor board rules challenged in court

I-1183 interpretations called discriminatory

Supporters of an initiative that privatized liquor sales in Washington now say state regulators are violating the law by arbitrarily restricting wholesale distribution and pricing of wine and spirits.

A lawsuit filed Thursday in Thurston County challenges rules the Washington Liquor Control Board has imposed on sales to restaurants and other volume buyers.

Under Initiative 1183, no single sale from a retailer to a restaurant can exceed 24 liters. The liquor board interpreted that to mean 24 liters per day. But a coalition of initiative backers, including the Washington Restaurant Association, the Northwest Grocery Association and warehouse giant Costco Wholesale Corp., say that’s wrong and that there’s no daily limit.

“Thousands of small businesses throughout the state will be harmed by the LCB’s rules, which impede competition and transfer market power away from the consumer,” Anthony Anton, president and CEO of the restaurant group, said in a statement Friday.

The liquor board said Friday in its own statement that the rules were drafted with the advice of the assistant attorney general assigned to the agency and only after public hearings that included the plaintiffs.

The lawsuit also challenges rules restricting deliveries and imposing fees and alleges discrimination against international manufacturers’ ability to supply retailers directly. The new rules benefit two large, out-of-state distributors, Southern Wine & Spirits and Young’s Market, which dominate the state’s market, the coalition said in a release.

The board also addressed widespread dissatisfaction with the higher cost of liquor sold by private entities, denying that its rules are responsible for the price increases.

“The truth is that the price of liquor is higher because of 10 percent fees at distribution and 17 percent at retail that the plaintiffs themselves drafted and voters approved in 2011,” the board said.