Measure 1183 officially “concerns liquor: beer, wine and spirits (hard liquor). This measure would close hard liquor stores and sell their assets; license private parties to sell and distribute spirits; set licenses fees based on sales; regulate licensees; and change regulation of wine distribution.”

Whoaaaaaaaaaa! This is full privatization via a Costco sponsored measure that organizes Washington wine and spirits sales to fit perfectly within its warehouse and distribution model. It also eliminates a legislative mandate to evaluate leasing the state’s distribution system even though two firms have submitted bids to do so. Every state that has privatized liquor sales has experienced increased per capita alcohol consumption. National health organizations warn against further privatization, let alone a big box business takeover that threatens smaller retailers and distributors.  According the Seattle PI politics blog on September 26, support for the measure dropped in the past month to the point where less than half those polled supported it, although there is still a large percentage undecided. I was stunned by the measure’s impact and now urge its defeat.

This privatization offers lucrative benefits to interested parties and disadvantages others. The voter’s guide estimates spirit stores will expand from the current 328 to1428. Smaller grocery outlets believe larger outlets with liquor stores will have advantages.  

It threatens the business survival of smaller distributors. It allows a retailer (Costco for example) to sell up to 24 liters of spirits for resale at a licensed retailer, such as a restaurant (Washington’s restaurant association helped sponsor it). Manufacturers may vary prices of wine and spirits to distributors (Costco could demand discounts). Distributors (Costco) could offer discounts to retailers. Retailers (Costco) could accept deliveries at warehouses and retail stores. Consequently the Washington Beer & Wine Wholesalers Association has contributed $500,000 to oppose it.  

Many of these changes could be made without wiping out control of spirits through liquor stores. Costco has reached for it all. Of course you could argue they deserve it since they graciously backed the measure.

What’s the fiscal impact on governments? The measure’s fiscal impact assumes increased sales from accessibility through more stores. However retailers typically pass on higher fees, so prices are expected to rise and partially limit sales. Spirits retailers would pay license fees of 17 percent of gross spirits sales. Distributors would pay an annual fee plus ten percent of gross spirits sales for two years and five percent thereafter.

 The fiscal analysis assumes sales increase five percent. Estimated revenue increases for the state and local governments are about $110 million each for the first biennium, a front-loading of benefits that appeals to voters. In succeeding bienniums it’s projected to raise about 10 percent more revenue for state and local revenues. It’s not worth it to me.   In sum, if the measure offers governments more money, money that comes from you and me and increased per capital alcohol consumption.

In my opinion per capita alcohol consumption would rise more than the five percent forecast in the long term because four times as many stores could lower prices from the initial fees and volume discounts. And there is no limit on the number of retail licenses that could be issued.  

The American Medical Association and the Center for Disease control say increased per capita consumption would occur and cause problems.  The AMA website called Alcohol Policy, MD recommends public/private control of alcohol distribution systems.

The Center for Disease Control studied every available report of privatization nationally and internationally. Increased liquor consumption occurred every time. In Iowa spirits sales rose 9.5%, and wine sales all rose much higher in West Virginia, Idaho, Maine, Montana, and New Hampshire. The CDC concluded, “Based on its charge to identify effective disease and injury prevention measures, the task force recommends against the further privatization of alcohol sales in settings with current governmental control of retail sales, based on strong evidence that privatization results in increased per capita alcohol consumption, a well established proxy for excessive consumption.”

Bruce Beckett, Governmental Affairs Director of the Washington Restaurant Association supports the measure in part because of increased penalties and required employee training of retail store employees. Jim Cooper, president of Washington’s Association for Substance Abuse and Violence Prevention disagrees. He doesn’t think increased penalties and the measure’s weak training requirements will restrict harmful distribution from sales clerks. He has proof. He told The Capital Reporter, “We have one of the highest compliance rates in the nation of not selling to minors. It’s about 98 percent. In non-control states, the numbers go down to 75 percent of so.”

Our state controlled liquor stores protect us. The AMA and Center for Disease Control says keep them. The meager long term revenue gain is not worth it. This measure overreaches. Vote no on 1183.