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Booze Battle 

Costco is pushing an initiative to privatize liquor sales in Washington. Sound familiar?

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Major grocery store chains are once again backing an initiative to end the state’s control of liquor sales, saying private liquor sales would take government out of the booze business and bring revenues to the state’s depleted coffers.

Initiative 1183 would allow private retailers to sell liquor, so long as the stores are big — at least 10,000 square feet. A significant portion of the money from the sales of the liquor would be earmarked for public safety spending.

“It ends the outdated sale of liquor by the state in Washington,” says Kathryn Stenger, spokeswoman for the Yes on 1883 Coalition. “The state does really strongly promote the sale of liquor when their core function should just be enforcement and oversight and regulation.”

Opponents say the initiative would lead to a proliferation of liquor stores, and an increase in underage drinking.

“No one can really say with any certitude how many liquor outlets would open under 1183,” says Alex Fryer, a spokesman for Protect our Communities, a group opposed to the initiative.

Stenger says I-1183 is written so that only major supermarkets, which have security guards, cameras and other measures to prevent theft and sales to minors, would be able to sell liquor.

However, the initiative carries an exemption that allows for outlets under 10,000 square feet with no liquor stores in their “trade area” to apply for a license.

Stenger says the exemption ensures that stores in small towns are allowed to apply for a license. Fryer disagrees, saying it is not defined in the initiative and could therefore lead to an explosion of booze retailers.

“This is a major loophole and a major problem for this initiative,” Fryer says about what he sees as a lack of specific information in the initiative. The voters “want to know exactly what will happen. And we don’t have that.”

If this all sounds familiar, it’s because it is: Liquor privatization was on the ballot in 2010. Propositions 1100 and 1105 were narrowly defeated after a push by opponents near the November election.

As with last year, retailers Costco, Trader Joe’s and Safeway are footing almost the entire bill. They’ve put up a majority of the $5,017,688 raised by the Yes on 1183 Coalition. Meanwhile, unions, wholesalers, distributors and some distillers contributed to the $7,384,700 funding for Protect our Communities.

“People were concerned last year because of the number of stores, and, quite frankly, the advertising by the opponents took advantage of that,” Stenger says.

The initiative would levy new taxes on both retailers and distributors, which would generate $443 million in extra state revenue should the initiative pass, according to information from Yes on 1183.

Fryer points to the support of stores like Costco, which he says only deal with the distiller and do not use wholesalers, as the impetus for large grocery chains to support the initiative.

“Costco wrote this initiative, and they wrote this to benefit themselves,” Fryer says.

Fryer added that the new taxes imposed by the initiative could lead to rampant price hikes.

“To bring in the kind of revenue that they promise, you have to have the highest mark-up,” Fryer says, which could be as high as 72 percent compared to the current 51 percent mark-up on liquor.

Sixty million dollars over the first six years comes back to the state, designated for public safety projects.

Stenger estimates that the initiative would bring $7.2 to $10.8 million dollars in new, local revenue for the first six years.

“That could be used for public services, for police, fire, educators,” Stenger says.

In comparison, Spokane received about $2.6 million from liquor sales in 2010.

But Fryer says the initiative earmarks no money for compliance officers to regulate what he expects to be an explosion of liquor stores.

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