Posted on | May 28, 2010 | 2 Comments
The recent initiative to privatize liquor sales in the State of Washington is picking up steam. Though this is not about beer, there are many in the beer industry who are probably interested in a major change in alcoholic beverage regulation in our fine state.
Initiative 1100 is the proposed legislation. The group behind this initiative is Modernize Washington, a Seattle based public interest group, providing not only the spirit behind the proposed law – but the statutory language itself.
A recent press release from Costco, showing support for the bill, puts the issue at the forefront of legislation challenges in Olympia. Of course companies like Costco, who has over 400 retail locations – all selling alcohol, stand to gain significantly from having access to liquor, for sale in their stores.
The proposed initiative would enable retail outlets like Costco to obtain licenses from the state of Washington, permitting it to sell liquor and permitting it to obtain liquor from almost any source – including the producers themselves.
Modernize Washington provides the following list of items that are at the heart of Initiative 1100. Take a gander for yourself:
- Washington State’s Liquor Control Board [LCB] will no longer sell liquor.
- LCB will end their current contracts with contract liquor stores.
- Current operators in good standing of contract stores will receive licenses to continue in business as a private retailer, if they wish to continue operating.
- LCB will no longer distribute spirits. The state distribution warehouse will be sold to generate money for the state.
- A new distributor can be licensed and may buy from any licensed distillery and sell to licensed vendors just like beer and wine sellers.
- Any store or distributor currently licensed to sell beer or wine, and in good standing, will be able to obtain a license to sell spirits, for an additional license fee.
- Local jurisdictions throughout the State can determine how many outlets they will allow in their city via zoning regulations.
- The state’s ‘mark-up’ on spirits is eliminated.
- The existing tax on liquor will remain and it will be up to the Legislature to adjust the amount of tax.
- The initiative mentions a 10% tax on purchases of spirits by restaurants. This is not a new tax or a tax increase. This is a technical update to current law, and merely requires private sellers to collect the existing tax which is now collected only by state stores.
- Repeals the “Three-Tier System”, a set of Prohibition-era “blue laws” which grant monopoly privileges to middlemen, at the detriment of consumers.
- Frees the LCB from the burden of enforcing outdated and unhelpful “blue laws”. The LCB will instead focus its mission on enforcement of licensing laws and education against under age drinking and general abuse of alcohol.
- All license fees from the new licenses to sell spirits may only be used for enforcing liquor laws and educating the public against underage drinking and other abusive alcohol consumption.
One of the points that strikes me as impressive, is their attempt to undermine the historic “Three Tier” distribution system that has followed alcohol sales from the end of Prohibition. The system demands that alcohol funnel through three sparties – the producer, the distributor and the retailer.
Over the past decade or so, states have weakened their stance on preserving this archaic system by permitting exceptions for brewpubs and even small breweries who sell and distribute their own products.
Modernize Washington has a copy of Initiative 1100 on their website. Take a gander at Section 15 on Page 9-10 of the document. This is one of the sections that directly repeals the “Three-Tier” distribution system that craft brewers, winemakers and distillers have grown to despise. This Section allows distillers to sell their alcohol to consumers and distributors on their own – without a middle man.
I welcome any comments on your views of Initiative 1100. As the document is extensive, we will continue to discuss its impact – as we learn more behind the initiative’s intent and application.
Leave your comments below.