Liquor initiative creates far more problems that it solves

September 25, 2011 

Washington voters rejected two liquor privatization measures last year, but undeterred, wholesale giant Costco is back with yet another initiative to create more liquor outlets across the state.

While we value Costco’s warehouse prices and the shopping opportunities they afford consumers, we don’t appreciate them trying to engineer public policy through a poorly crafted Initiative 1183.

We, as a state, value public safety. We support strong liquor enforcement to protect minors, and we don’t want a liquor outlet on every street corner like the state of California. Initiative 1183 will provide less choice, higher prices and create social harm.

Costco has put $5 million into the “Yes on 1183 campaign” – about 96 percent of the campaign treasury. It’s true that the association of large grocers like Safeway, Fred Meyer and QFC, have added their support, because they, too, want to be able to offer hard liquor on their store shelves.

Joe Gilliam, president of the Northwest Grocery Association, said in addition to ending the state’s monopoly on liquor sales and forcing the state to focus on enforcement, grocers support the initiative because they expect to make a profit. “If we were going to lose money on this initiative we wouldn’t be supporting it,” he said candidly.

He and other supporters say the state’s current liquor distribution and sales model is inefficient. Proponents note that the initiative calls for stiffer penalties for outlets that sell to minors and more training for store clerks. They argue that liquor competition is good for the state and its citizens.

In the case of I-1183, we respectfully disagree. While there are good arguments that can be made for privatization, Initiative 1183 is not the answer. It’s a seriously flawed measure that is good for retail outlets, but is not good for the citizens of this state – especially young people who will have increased access to hard liquor and all the associated problems that comes with that.

Proponents say in the voter pamphlet that “1183 specifically prevents liquor sales at gas stations and convenience stores.”

That is not true. Nowhere in the 32-page initiative will you find a specific provision preventing liquor sales at gas stations and convenience stores. In fact, Initiative 1183 opens the door to convenience stores and mini-marts through a poorly crafted exemption.

While it is true that the initiative attempts to limit liquor outlets to retail stores of at least 10,000 square feet, I-1183 creates a huge loophole allowing the state to license smaller outlets where there is no liquor outlet in their “trade area.”

The problem is nowhere in the initiative is there a definition of what constitutes a “trade area.”

Is a trade area 10 blocks or 10 miles? It’s not defined and as a result convenience stores and mini-marts could get a license to sell hard liquor since there is no specific prohibition against them.

That’s a huge – in our mind, fatal – flaw in this initiative, because it creates the potential for multiple liquor outlets in every community across Washington state.

And those who think liquor prices will go down will be surprised by the analysis by the state Office of Financial Management that says liquor markup will actually increase because the Initiative calls for two “fees.”

They aren’t called “tax increases,” but that, in essence is what the fees amount to. I-1183 calls for a 10 percent “fee” on distributors and a 17 percent “fee” on retailers. Proponents say the “fees” and other provisions of I-1183 will generate $443 million in additional revenue for state and local governments over a six-year period.

But at what cost?

Today, law enforcement sting operations show that clerks in the state liquor stores stop minors from purchasing alcohol 97 percent of the time. Clerks at grocery stores, mini-marts and convenience stores sell to minors on average one out of every four attempted purchases. 1-in-4. That’s a horrible compliance record – and one that greatly endangers our youth.

Now, under I-1183 we’re going to increase the number of liquor outlets from 328 today to an estimated 1,428 outlets – or far more if convenience stores are allowed to sell – and we’re going to keep the same 80 liquor enforcement officers. How is that going to improve public safety and reduce the risk of minors purchasing alcohol?

When voters receive their ballot, they must ask themselves, “What problem is Initiative 1183 trying to solve?” In our opinion, I-1183 creates problems by increasing liquor outlets, increasing consumption with the potential to increase teen drinking, and alcohol-related collisions and violence.

Vote “no” on Initiative 1183.

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