Business

Some costs may rise when private retailers sell booze

Jim Mackey checks out the draped shelves of liquor that will go on sale starting Friday at the South Hill Safeway and other retailers around the state. “It’s great that the grocery stores are going into the liquor business,” Mackey said. (Colin Mulvany)
Jim Mackey checks out the draped shelves of liquor that will go on sale starting Friday at the South Hill Safeway and other retailers around the state. “It’s great that the grocery stores are going into the liquor business,” Mackey said. (Colin Mulvany)

If Washington voters thought that letting private retailers take over liquor sales would make life simpler, they might have been wrong.

Come Friday, prices for thousands of different libations will vary from store to store, and customers hunting for the best deal will need a calculator to learn whether they’re getting a bargain.

Many Washington voters might have approved Initiative 1183 last fall hoping it would lower liquor prices by taking government out of the picture.

In the near future, at least, that’s not likely to happen. With some exceptions, prices for liquor at retail stores will be higher than they have been at state stores, surveys showed.

For example, QFC, a Western Washington food store, will sell 1.75 liter bottles of Tanqueray London Dry Gin for $51.65. That same item at state stores has cost $49.95.

Both prices include state sales taxes; the initiative didn’t remove the state liquor tax and liter tax. The state sales tax on liquor is 20.5 percent, not the 8.7 percent charged in Spokane County on all other items.

But there will be exceptions, said Chris Marr, a Washington State Liquor Control Board commissioner and former state senator from Spokane. “I can see there being a lot of retailers at the beginning keeping their price margins very low, to keep people in their stores,” Marr said.

“They’ll be careful about overpricing from the start,” he said.

Costco, the Issaquah-based warehouse retailer and the company that spent millions supporting the initiative, intends to win customer loyalty by careful pricing on liquor items, said John McKay, the company’s executive vice president for operations.

Costco will carry about 70 different liquor items. McKay said the prices of some bottled liquor items will be lower than current state prices by “cents in some instances to a dollar or so” in others, he said.

He declined to give any exact comparison.

McKay said the Costco prices he used to make overall comparisons with state liquor prices include taxes and state fees. “That way I’m giving apples-to-apples figures,” McKay said.

But Costco and many area retailers won’t be giving consumers the full sticker price on shelves, starting Friday. Most retail stores will have disclaimers and signs near liquor shelves noting the listed prices do not include the 20.5 percent sales tax and the liter tax.

That means liquor prices on the shelf will be either lower than the price at the register, or in some cases, exactly the same.

In state liquor stores, the price on the shelf was the item’s actual price.

For instance, a $20 fifth of alcohol in a shopping cart will go through two additional price hikes at checkout. One line on the receipt will list a state liter tax, in this case $2.83 for 750 milliliters. A full liter will be taxed $3.77 and 1.75 liter bottles will be taxed $6.60.

The receipt next will tack on the state spirits sales tax of $4.10 for that bottle. All told, the $20 fifth will cost a total of $26.93.

The retailer’s base price, meanwhile, reflects a markup that includes some profit and the cost it pays to distributors who deliver it, plus a new 17 percent fee the state requires from retailers as a way to recoup money the state no longer will collect from liquor sales.

Some retailers think the sticker shock of those added taxes will cause confusion or anger.

Mark Bahr, who’s taking over the state contract liquor store in Medical Lake, decided recently he’s going to list the full amount on the shelf.

“People have been used to seeing one price in the state liquor stores. I would rather not see them get hit at the register with the fees and tax and then say, ‘Hey, I didn’t know it costs that much.’ ”

Tillman Carr, another owner of a former state contract store, is taking the opposite view. He’s likely to list just the pretax price at his store, at 2720 First St., in Cheney.

“That will cause some confusion at the checkouts. But that’s what people will be seeing when they shop at Safeway or other stores,” Carr said. “I don’t think I want to disadvantage myself by showing prices on the shelf that look higher than what customers see elsewhere,” he said.

Carr, like Marr, said he’s sure the prices and the specials will change frequently over the first few months of private liquor sales in Washington. “It’s going to level out and move around, like everything else. Some people will price too high, and others a little too low, but it will settle down later,” Carr said.



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