Liquor Privatization Will Go To Voters Again In Washington, With Revised ProposalJuly 18, 2011
Two voter initiatives to privatize liquor sales in Washington State went down to defeat last November, but proponents of one measure have regrouped and gotten a new version on the ballot this fall. The bill, I-1183 (previously I-1100), garnered more than 354,000 voter signatures by the July 8th deadline—far more than the 241,153 required by state law.
The measure’s major sponsor is Costco, and the initiative has now been rewritten to address citizen concerns over sales to minors in a privatized system. Under the new plan, only retail stores with at least 10,000 square feet of fully enclosed retail space would be allowed to sell liquor. Around 1,500 stores in Washington meet that standard, according to Costco. Last November’s proposal envisaged roughly 5,000 licensed private stores. The new plan excludes gas stations and most convenience stores. Addressing worries about potential state revenue losses under a private system, the new proposal calls for retailers to pay a 17% fee on all liquor sales and for private distributors to pay a 10% tax on gross liquor sales for the first two years of the plan. A 5% tax would be imposed each year thereafter. Also, city and town governments would have final approval on all zoning for private liquor stores.
The initiative would allow volume discount pricing on wine from suppliers or wholesalers to retailers—a provision Costco has sought for years in Washington State—as well as central warehousing of wine by retailers.
“We were aware of voter concerns over I-1100,” says Mark Funk, a spokesperson for the Yes on I-1183 campaign. “We’ve now designed a better initiative.” The measure is also being supported by the Washington Restaurant Association and the Northwest Grocery Association.
Another liquor privatization measure was signed into law on June 14th by Washington Governor Chris Gregoire. That law allows the state to sell off the wholesale portion of its liquor monopoly to a private entity for a one-time fee. Fueled by concern over the state’s budget woes, the bill was pushed through the legislature under an emergency clause in Washington’s constitution declaring that it was “necessary for the immediate preservation of the public peace, health or safety” and “the support of the state government and its existing public institutions.” The request for proposal (RFP) for the state’s wholesale liquor business will be issued on September 20th, with proposals due by October 8th. The passage of I-1183 in November would override the wholesaler privatization law. The state is thus set for another round in the privatization battle.
|Distilled Spirits – Top 10 Control States
(millions of nine-liter cases)
|Percent Change1||Market Share1|
|Total Top 5||27.4||27.8||28.4||1.5%||2.0%||60.3%||60.2%||60.1%|
|Total Top 10||40.6||41.3||42.1||1.7%||2.1%||89.2%||89.2%||89.2%|
|Total Control States3||45.5||46.3||47.2||1.7%||2.1%||100.0%||100.0%||100.0%|
|1Based on unrounded data.
2Includes Montgomery County, MD.
3Addition of columns may not agree due to rounding.
Sources: NABCA/IMPACT DATABANK