Politics & Government

State's 166 liquor stores to close by June

Costco is toasting its success.

And state liquor-store employees could use a drink.

The 166 stores where they work will close by June 1. Three of every five voters were backing Initiative 1183 in early returns, choosing to join most other states by withdrawing government from the liquor business.

“I think every taxpayer and consumer in this state benefits,” said Bruce Beckett, government affairs director for the Washington Restaurant Association.

The most expensive ballot-measure fight in state history pitted retail giant Costco against national liquor dealers. The two sides spent at least $30 million, a sum usually seen only in races for governor or U.S. Senate.

It was probably enough to buy every registered voter a cocktail, but was largely spent persuading undecided voters by filling the airwaves with arguments about public safety and corporate greed.

Costco alone contributed more than $22 million to the campaign – though it could get a refund of any unspent money – with other grocers, restaurants and other supporters kicking in far smaller amounts.

“It took an awful lot of resources to overcome some information that was being perpetuated by the opponents,” Beckett said of the record-breaking Costco donation.

It was a rerun of last year’s campaign, except last year voters refused to go along with Costco’s privatization plan.

Now Washington will join the 32 states that leave hard liquor to the private market – with at least one big difference. With some notable exceptions, liquor won’t be sold at stores smaller than 10,000 square feet, about the size of a typical Trader Joe’s.

Costco and its allies added that provision as a way to counter worries that mini-marts and gas stations would spring up everywhere. That likely played a role in voters’ rejection of a similar measure on last year’s ballot.

Authors also added new fees that make sure local governments won’t be harmed. In fact, local and state governments potentially stand to add revenue – more than $400 million over six years, the governor’s budget office predicts.

Opponents said they hope I-1183 fulfills supporters’ promises and benefits local law enforcement.

Still, some government employees will have to find new jobs – though Beckett said those employees have skills that will transfer to private stores.

“More than 900 people will lose their jobs as a result of I-1183, and our thoughts are with them and their families,” said Alex Fryer, a spokesman for opponents, in a statement.

But maybe the biggest change Costco made was going all-in on spending.

The Issaquah retailer had plenty to gain. The initiative will provide a new line of products and will rewrite the rules that keep alcohol buyers from negotiating discounts based on volume. Beer will remain restricted, but discounting will be possible for wine and liquor.

It’s not completely clear what the new rules and the end of a government monopoly will do to the cost of booze. Liquor prices in Washington are some of the highest in the nation, but that’s mostly because of high taxes that won’t change.

Supporters spent at least $18.5 million, while opponents spent at least $11.7 million fueled mostly by contributions from alcohol wholesalers.

The wholesale distributors worried about being cut out of their legally protected role as middlemen. I-1183 allows retailers to distribute to their own stores through a central warehouse.

The wholesalers paid for ads suggesting that a loophole in the law would allow minimarts to flourish after all. Their numbers were invented, but some smaller stores will indeed sell liquor.

Some could replace the current government stores, and others will be new versions of the private stores that contract with the government. But the state liquor board could authorize others in areas with no large stores. The size of those areas isn’t defined.

Jordan Schrader: 360-786-1826 jordan.schrader@thenewstribune.com blog.thenewstribune.com/politics Twitter: @Jordan_Schrader