HighWaterPants

Liquor Board Considering More Alterations to Voter-Approved Privatization Law

Last November, Washington voters approved Initiative 1183 by an overwhelming margin, moving the state away of a Prohibition-era liquor control regime and toward a free-market system that still retained important enforcement authority for the government.

Four months later, the Liquor Control Board—and the soon-to-be ex-beneficiaries of the closed economy for spirits it roosted over—are still having trouble accepting the public’s decision.

Almost as soon as the results from last year’s election were certified, unions representing workers affected by the legislation filed lawsuits challenging the measure, though motions to postpone implementation of 1183 were rejected.

Then, Democrats in the State Legislature built what can best be described as a legislative smart bomb, a bill explicitly designed to exclude 1183’s largest sponsor—locally-based warehouse retail giant Costco—from selling liquor under the law it helped to pass.

The legislative effort to drastically alter a voter-approved law became an embarrassment for the three Democrat sponsors of the bill when media attention generated a backlash and was quietly pulled after the effort to pass same-sex marriage took center stage.

Most recently, the Liquor Control Board is using its rule making authority to tinker with a crucial feature in 1183 that makes it legal for restaurants to buy liquor directly from retailers or distillers, cutting out distributors and wholesalers.

In a post Tuesday, Washington Restaurant Association government affairs manager Julia Clark explained the change the Board currently under consideration:

Initiative 1183 privatizes the sale and distribution of liquor and creates competition for the first time for restaurateurs, by allowing them to purchase from distillers, from retailers and direct from distillers. The initiative’s only restriction is that sales between retailers and restaurants must be in 24 liters per sale, and the retailer must retain records documenting the purchase. There are no limitations on the number of sales that can occur, but the Liquor Control Board is considering amending the initiative to further restrict the number of sales through rule.

Ironically, any rule restricting distillers’ ability (including Washington State’s burgeoning craft spirits industry) to sell direct could, in effect, perpetuate a system of artificial barriers to new spirits makers in a market dominated by out-of-state mega-distillers. It could also stop a new wave of interest in locally-produced spirits before it can really get going by making it marginally harder for restaurateurs to showcase the work of small distillers.

The in-state cottage industry for the high-class hooch is a potential niche for those restaurants and retailers already catering to customers with specialized tastes. The same customers who demand a wide selection of local wines at their supermarket may also seek out stores stocking a selection of spirits from quality local producers.

According to an LCB representative, the Board did not open up the issue during a meeting held Wednesday, but the proposal to eliminate distiller sales could have be discussed during a public hearing as soon as April 11.

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