Washington: The private sale of liquor in Washington is working

Seattle Times editorial columnist Bruce Ramsey argues that the privatization of bottled liquor sales in Washington is working out better than feared in the Initiative 1183 campaign of year ago.

Source: Seattle Times

Bruce Ramsey

Aug 14th

A year ago the initiative to privatize the sale of bottled liquor in Washington led to the most expensive ballot-measure battle in state history. Compare what was said with what has actually happened since Privatization Day, June 1.

The ads opposing Initiative 1183 were saturated with alarm. One had a firefighter whose sister had been killed by a drunken driver: "1183 expands hard liquor sales to almost 1,000 minimarts, dramatically increasing teen access to liquor, leading to more senseless deaths." As he spoke, a plague of red lights spread across a map of Washington.

This was a giant exaggeration. The initiative limited new licenses to stores of at least 10,000 square feet unless there are only smaller stores in a trade area. It left "trade area" to be defined by the Washington State Liquor Control Board, which has not yet done it. As a result, no store of less than 10,000 square feet has been given a new license, though some of the stores grandfathered from the old system are minimart-sized. There may be some new minimarts licensed to sell spirits, but not 1,000 of them.

The No on 1183 campaign argued the state was better at verifying that buyers are old enough to buy alcohol. Before liquor privatization, state stores had a tested compliance rate of 94 percent, while private stores selling beer and wine had a rate in the 70s. But the liquor board has just tested the new retailers, and the compliance rate in July was 92 percent.

Privatization has brought problems, but ones more easily fixable than those so darkly warned of a year ago. One of the two big wholesalers, Southern Wine & Spirits, set up a new warehouse and, on June 1, wasn't quite ready. Bartell Drugs found that it took extra effort to protect liquor inventory from theft. Consumers at some retailers were confused when the new taxes were not included in posted prices. Some buyers made mistakes when comparing fifths (750 milliliters) with liters (1,000 milliliters).

Liquor prices are kept high by the new state taxes and the $150 million fee wholesalers paid to take over the state's business. Also, retailers and restaurateurs say the new Liquor Board rules are keeping prices high. Several of those rules have drawn a lawsuit.

The pro-1183 campaign of a year ago, which was bankrolled by Costco Wholesale, implied lower prices without actually promising them.

"Our prices are lower," says Joel Benoliel, Costco senior vice president and chief legal officer. "We made a point of that." So did some others -- the new Total Wine & More store in Bellevue, for example -- but prices at some retailers are higher.

Private liquor sale is not only about price. It's about choice. If you want price, you have to shop around. Anthony Anton, president of the Washington Restaurant Association, says restaurant owners are learning they can bargain with wholesalers.

Some people complain they can no longer find their favorite artichoke liqueur. However, some niche products benefit. At Sound Spirits, Seattle's producer of Ebb + Flow vodka and gin, "We're busy," says founder Steven Stone. "We have a lot of new retailers."

At the state's oldest craft distiller, Dry Fly Distilling in Spokane, co-owner Kent Fleischmann says, "Our production is way up."

Privatization has been jarring and sometimes scary, and it is going to work. The rough consequences predicted a year ago have not happened. There has been no "dramatic increase" in teen access to liquor. People have not gone wild.