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I-1183 Puts Liquor Privatization Talk Back On The Table

Posted on | August 9, 2011 by | 3 Comments

Liquor privatization is back, with a vengeance.

 

***This was originally published on BeerBlotter.com, a Seattle based beer blog edited by my wonderful wife. I provide legal commentary to BeerBlotter.com throughout the year.***

 

We can all curse it – we can all love it. The fact of the matter is that another voter initiative is here and its hoping to break liquor from the controls of the state. Will this new one be bringing additional changes to the current alcohol regulation scheme? Yep.

 

Last year, I-1100 took Washington by storm. That voter initiative that was funded primarily by Costco and was the topic of conversation on this blog and many others for a matter of months. In the end, I-1100 lost by a fairly narrow margin of 53-47.

 

This year’s initiative took a different approach – scale back the “open market” approach, raise money for the state and file late.

 

I-1100 was an open market proposal aimed at pulling all sales restrictions on all products. That proposal drew the ire of the Washington Beer Commission who feared wholesale discounts for out of state producers, less shelf space and the emergence of tied-houses. I-1183 heard that disdain and decided not to mess with prohibitions against shelving deals, credit sales and other wholesale discounts.  Convenience stores are not going to have the opportunity to sell liquor under the new initiative – only specially licensed stores with adequate (10,000) square footage.

 

The Washington Beer Commission has not made their position public, but I suspect they will have a different response. The law simply doesn’t raise as many flags as last year’s proposal.

 

Perhaps the most helpful to this year’s movement is its focus on putting money in the state’s pockets. According to supporters, I-1183 puts close to $200 Million in the state’s pockets over the first two years, allowing it to finance healthcare and alcohol control programs. Making the state money without having to make it work? That might sound appealing to most voters – well, at least those who aren’t employed at state liquor stores.

 

Finally, I-1183 benefits from its late arrival. By waiting until the final days to both file their initiative and file their signatures, I-1183 prevented a competitive piece of legislation from arising and distracting voters. Last year, I-1105 was filed by booze distributors and was blamed for distracting voters. This year – I-1183 stands alone on the ballot.

 

The problem is that distributors made a different type of stance this year – through the legislature. Senator Mike Hewitt (R-Walla Walla), a former booze distributor, pushed a bill through the legislature that allows the state to entertain offers to lease the liquor sales system to a private distributor. Many were angered when Gov. Gregoire signed the law this summer, but I wonder whether it will actually have an effect on what the state does going forward. In order for the law to have an effect, the state would have to find a suitable bidder to lease the entire monopoly and have the legislature approve it, all before the voters pass I-1183. In doing so, the state would have to find a bidder willing to make an offer with the risk that it will be embroiled in a contract dispute with the state if the initiative passes. If it seems like a mess – it is.

 

As of this week, Costco had committed to donating over $2.2 Million and Trader Joe’s had pumped in $50,000.00. The Washington Restaurant Association and the Northwest Grocery Association are also publicly behind the initiative. Early reports are that small winery groups are going to support it, while larger outfits will oppose it.

 

While we await the formal position of the Washington Beer Commission, take some time to review the new initiative in its entirety. While a thrilling read (joke), you might be more interested in the condensed version of key facts provided by the initiative’s writers.

 

Get ready for another politically charged year of booze battles. Here we go again.

 

 

Comments

3 Responses to “I-1183 Puts Liquor Privatization Talk Back On The Table”

  1. Bryan
    August 13th, 2011 @ 8:19 am

    Craziness… I wonder what kind of effect this would have on the craft brewer if it went through? Would they not be able to keep up with the low prices of the comglom-o-beer companies?

  2. Beer Blotter: Seattle based. World focused. » Beer Law: Elway Poll Shows Voters Split On Washington Initiative 1183
    August 24th, 2011 @ 10:14 am

    [...] couple of weeks back, I dropped a line on Washington’s newest liquor initiative. The results of the first Elway Poll have already surfaced and my expectations have prove true: [...]

  3. james C Davis
    September 29th, 2011 @ 7:42 pm

    The state should have been out of selling boo ze years ago ,They sell it to us then when we drink to much they fine us and throw us in jail.making money on both ends.thats a confect of intrust.and if you need 10.000 sq feet to be able to thats going to take most of the gas station/convience out of selling any hard Booze.

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