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Spin Control

Sunday Spin: Initiative fights continue after elections end

OLYMPIA – For a political reporter, state initiatives have become gifts that just keep on giving.

There have always been plenty of unusual ideas for ballot measures that crop up every spring, sort of like dandelions in the political lawn, and knock-down campaign battles over the few that collect enough signatures to make the ballot.

Some measures manage to remain controversial long after voters approve or reject them. . . 

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. . . Last week the latest fight over the initiative that got the state out of the wholesale and retail booze business got a hearing at the state Liquor Control Board. For those who’ve forgotten, Initiative 1183 was supposed to replace the inefficient government with much-superior private enterprise for liquor sales.

What none of the latter-day Adam Smiths supporting I-1183 predicted, or at least didn’t own up to, was the prospect that so-called free market system might wreak havoc on small businesses while it was boosting the fortunes of big businesses like Costco and Safeway. Now the liquor board is trying to choose between two groups of small businesses warning of dire consequences – one if things don’t change; the other if they do.

In one corner are folks who bought, often for five or six figures, the rights to open in the old state-owned liquor stores. That may have been a shrewd business move when the state kept a tight rein on the number of booze emporiums in any community, but with nearly every supermarket and drug store stocking shelves with at least a few bottles of hooch, many of the new owners find themselves priced out of a key business the old stores used to have, sales to restaurants and bars.

Most states don’t allow liquor stores, which sell booze by the bottle, to sell at special rates to folks who sell it by the drink. In the brave new laissez-faire world of I-1183, Washington does. Owners of the old state stores argue this only makes sense if they can sell it to restaurants and bars at a price close to what those customers pay a distributor. The big stores pushing a limited number of brands get volume discounts from many distributors. Restaurants and bars do too, even if their volumes are more at a whisper than a shout. The small stores say they don’t, and want the liquor board to step in and ban what’s known as channel pricing.

In the other corner are restaurants and bars who say this will raise the price to them, and any increase in the price of a bottle translates into a hike in the price of a drink at the bar or a glass of wine on the menu, and thus fewer customers at tables or booths. They argue they don’t swim in the same “channel” as the liquor stores because they sell liquor an ounce or two at a time while the stores sell it by the bottle. Distributors, not surprisingly, agree.

But stores can now offer tastes of a half-ounce or so of distilled spirits just as restaurants can feature special prices on something from a particular winery or distillery, shop owners say. With every new wrinkle the Legislature adds to the state’s liquor laws, the lines between the channels get blurrier.

Chris Marr, a liquor board member, said state law allows for discounts for “bona fide business purposes.” The debate continues as to whose practices are the more bona fide.

An initiative doesn’t even need to pass to feed the political grist mill. Last year’s failed effort to require genetically modified foods to be labeled in Washington could keep supporters and opponents in the court, and in headlines, for months to come. Attorney General Bob Ferguson is already pursuing legal sanctions against the Grocery Manufacturers Association for allegedly hiding the source of its contributions. Last week the state Public Disclosure Commission asked him to consider similar action against Food Democracy Action, one of the supporter groups.

The reason, commissioners said, was they didn’t have a big enough stick to whack Food Democracy Now for not reporting some $295,000 in contributions and expenditures until after the election. They can only fine someone a paltry $10,000.

FDA’s attorney argued the Iowa-based non-profit shouldn’t get such harsh treatment because a) they’re small; b) they didn’t know the rules and c) it wasn’t really THAT much money, considering the yes campaign spent more than $8 million.

In other words, people from other states who want to tell Washington residents how to change their laws should be forgiven their trespasses if they don’t spend too much money, and don’t spend any of it to hire someone to check the campaign laws in the state they want to influence.

Doesn’t sound like a very good precedent.

Jim Camden
Jim Camden joined The Spokesman-Review in 1981 and retired in 2021. He is currently the political and state government correspondent covering Washington state.

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