Since liquor sales went private, they’ve risen a bit

rboone@theolympian.comDecember 5, 2012 

Statewide liquor sales by volume rose a modest 2.9 percent through September, the results helped by consumer purchases but pulled lower by a drop in wholesale sales, according to new data released Tuesday by the state Department of Revenue.

Liquor privatization in Washington was voter approved and took effect in June.

Sales by volume rose nearly 3 percent from June through September, compared with the same period last year when liquor was sold and regulated by the state.

Consumer purchases rose 7.9 percent in the same four-month period, compared with last year, while bar and restaurant purchases fell 12.6 percent, the data show.

The state Department of Revenue attributed the decline in wholesale sales to the following possible factors: higher prices, weaker demand, supply issues, and the fact that bars and restaurants might still not need to replenish inventories because they stocked up before the June 1 privatization date.

As for higher prices, the average retail price of a liter of spirits, including taxes, rose 11.6 percent to $24.09 in September from $21.58 in the same period last year.

Private liquor store owners, who purchased former state-run liquor stores at auction before June 1, said Tuesday that sales gradually are improving, helped by deeper selections of liquor products and knowledgeable employees.

“It is increasing slowly but steadily,” said Darren Smith, who bought the former state-run store in Tumwater and opened Tumwater Liquor & Wine.

The novelty of being able to buy liquor just about anywhere has worn off, he said, with more and more customers returning to his store. He’s competing for their business by offering a wider selection of craft liquor products and retaining the store’s former employees.

His business also sells to about 10 restaurants and bars, a key segment of business for many of the former state-run stores and contract liquor stores.

But now some liquor distributors are selling direct to those wholesale customers, Smith said

“It would be better to not have competition, but it’s not realistic,” he said. “We have to compete in the market, just like anybody else.”

Andy Thielen and his brother bought the former state-run store in downtown Olympia and have renamed it T. Bros. Liquor and Wine Lodge. He said sales have been steady, helped by beer and wine sales.

“Wine sales have seen a huge increase with the addition of the wine cellar,” he said, adding that wine sales represent about 15 percent of the store’s business.

Spirits remain a core product for the business, Thielen said.

Have there been surprises? Yes, he said, joining a chorus of store owners who thought a 17 percent fee paid to the state strictly applied to retail sales, but not wholesale sales. That was not the case, and some of those store owners have sued the state, although Thielen is not party to any legal action, he said.

“Everything else is what we expected and why we got into it,” he said.

Rolf Boone: 360-754-5403 rboone@theolympian.com theolympian.com/bizblog @rolf_boone

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