Wash. Retailers, Restaurants Aim to Revamp Liquor Distribution and Sales

A coalition of retailers and restaurants, among them Costco, the Northwest Grocery Association and the Washington Restaurant Association, has filed a ballot initiative that seeks to privatize the distribution and sale of liquor in Washington state, in a move it believes will pour hundreds of millions of dollars in extra revenue into state and local governments.

“This initiative will modernize the wholesale distribution and retail sales of liquor in a way that increases consumer choice and convenience, and increases state and local revenues, while continuing to protect public safety and strictly regulate the distribution and sale of liquor,” said Joe Gilliam, president of the Boise, Idaho-based Northwest Grocery Association, which represents more than 1,600 retailers in the region, including more than 400 Washington grocery stores.

The initiative stipulates that a limited number of retail stores would be permitted to sell liquor if they meet certain requirements. Eligible stores would be required to have a minimum of 10,000 square feet of fully enclosed retail space within a single structure or, in areas where larger stores are absent, meet other requirements set by the Liquor Control Board.

“Under the initiative, an estimated 1,500 grocery and retail stores would be eligible to apply for a license to sell liquor,” explained Gilliam. “The initiative would prohibit liquor from being sold at gas stations and small convenience stores. In addition, the initiative requires a retail store to demonstrate to state regulators that it can effectively prevent sales of alcohol to underage minors in order to get a license to sell liquor. It also ensures that local communities have input before a liquor license can be issued to a local retailer, and maintains all local zoning requirements and authority related to the location of liquor stores.”

Stores approved for licenses to sell liquor would pay 17 percent of their gross revenues from liquor sales to the state, according to the initiative, while businesses that obtain licenses to distribute liquor would pay 10 percent of their gross revenues to the state for the first two years, and 5 percent thereafter.
According the coalition of retailers and restaurants, these combined license fees would generate tens of millions of additional annual revenues for state and local governments than the current state liquor store system does, on top of the millions in cost savings and profits from closing and selling the state’s liquor facilities and assets.

Additional initiative provisions include the following:

• The state government would auction off its existing state-owned liquor distribution and liquor store facilities along with the associated equipment.
• Private distributors of alcohol would be permitted to obtain licenses to distribute liquor if they’re approved by the Washington State Liquor Control Board.
• License revenues from distributors and retailers would go into state and local budgets, using the same formula applied to state liquor taxes, which would remain the same.
• A portion of the new revenues raised from liquor license fees would go to boost funding for local public safety programs, including police, fire and emergency services in communities throughout the state.
• Fines and license suspension penalties for selling liquor to minors would be beefed up.
• Wine distributors and wineries would be permitted to give volume discounts on wholesale prices of wine to retail stores and restaurants
• Retailers would be able to distribute wine to their own stores from a central warehouse.

“By allowing competition in the distribution and sale of any product, including liquor, you bring about efficiencies, better product availability and more choices for customers,” noted Anthony Anton, president and CEO of the Olympia-based Washington Restaurant Association. “We think this initiative improves upon previous liquor privatization proposals, and we are confident that we have developed a measure that most voters will support.”

The initiative must go through the state process to establish an official ballot title before petitions can be printed. Supporters say they expect signature gathering to begin in about a month. If enough signatures are collected, the initiative will qualify for submission to Washington voters on the November state ballot.