liquor-boxes.jpg
Voters wanted cheaper liquor, more choice and convenience. They wanted the state out of the liquor business. On June 1, the state's nearly 80-year monopoly on the sale of liquor ends. (AP Photo)

Grocery stores, discount chains prepare for liquor sales

BY Tim Haeck  on May 23, 2012 @ 5:08 am (Updated: 11:06 am - 5/23/12 )

Voters wanted cheaper liquor, more choice and convenience. They wanted the state out of the liquor business. On June 1, the state's nearly 80-year monopoly on the sale of liquor ends.

The voter-approved transition means the end of state-run distribution and sales of liquor, opening up the business to new wholesalers and retailers.

Mikhail Carpenter, at the state Liquor Control Board says state regulators are in the process of issuing hundreds of new licenses while auctioning more than 150 state liquor stores.

"It's a huge process to essentially shut down a $1 billion business and to do it in six months," said Carpenter.

It's been a bumpy transition for some bar and restaurant owners and their customers, who complain about shortages of some of their favorite beverages. At the Zig Zag Cafe, in Seattle, co-owner Casey Fitch has been dealing with a dozen potential new distributors trying to figure out the best way to supply his well-regarded Pioneer Square bar.

"Chaotic would be the best word for it," he said.

Bruce Becket, with the Washington Restaurant Association says the fledgling new warehouse distribution system is not up to speed yet, even though private wholesalers have been selling liquor in Washington since March 1. Retailers, bars and restaurants are also still buying through the old system but the state-owned stores got their final shipment of booze last week.

Larger grocery stores, discount and drug stores are preparing to stock their shelves with liquor and start selling next week. Fred Meyer's Melinda Merrill says it's been a whirlwind of employee training, programming computers, pricing, finalizing distribution and warehousing.

Like most grocery store items, margins are slim for spirits but she says Fred Meyer has to be in the liquor business for the convenience of customers.

"They like it, and they respond to it, and they purchase it, and it's a strong part of our business in other states, and will be a nice convenience factor and a strong part of our business here," said Merrill.

It figures that service and selection will increase with so many new wholesalers doing business here. And everybody wants to know if liquor will cost more, or less after June 1?

"Yes, definitely," responds Fitch at the Zig Zag Cafe. "Prices have to go up. They certainly won't be going down. We might be able to keep some of the prices equal to what they used to be," said Fitch.

Beckett, with the Restaurant Association, says he's seen some attempts at price gouging by distributors but he expects competition will quickly eliminate that.

Competition tends to keep prices lower but new fees and markups could offset that, and then some.

Privatization eliminates the state markup of more than 50 percent on liquor but new distributors will presumably replace it with their own markup. The new system comes with new fees that will also keep the price of liquor high. One estimate, from the state Office of Financial Management, suggests the markup could go as high as 72 percent.

Fred Meyer's Merrill won't predict prices. She thinks time will tell how many retailers will stay in the business of booze.

"I think it will be long," said Merrill. "I think it will take a couple years at least to shake out the competition and the prices and the fees and get to a place where it settles," adding "it will be an interesting ride."

Tim Haeck, KIRO Radio Reporter
Tim Haeck is a news reporter with KIRO Radio. While Tim is one of our go-to, no-nonsense reporters, he also has a sensationally dry sense of humor and it will surprise some to learn he is a weekend warrior.
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Comments (33)


  • Add A Comment

  • ron prevost wrote...
    a brave new world
    May 23, 2012 5:55 am
    weirder yet if and when the State Supreme Court rules against the initiative.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Alex Mason wrote...
    It's a great day for the free markets.
    May 23, 2012 6:45 am
    It's about damned time.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • TwoTrees wrote...
    "Privatization eliminates the state markup of more than 50 percent on liquor but new distributors will presumably replace it with their own markup."
    May 23, 2012 6:53 am
    Hmmm...possibly. However, prices had a snowball's chance in Hades to go down under state control. It may not be immediate, but the presence of competition should achieve just that.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • mnpat wrote...
    If it breaks up a monopoly..
    May 23, 2012 7:13 am
    It's a good thing, competition is the only alternative to higher prices.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • jpmarine wrote...
    Higher prices are just a scare tactic
    May 23, 2012 7:17 am
    Go to any state where liquor is privately sold, and the prices are half of what they are here, but nice try.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • messiah101 wrote...
    jpmarine
    May 23, 2012 9:20 am
    Scare tactic? To scare us of what? This thing is already happening.And no prices are not half of what we pay in Washington State.They are lower but not near 1/2.Of course I believe one of the reasons the STate was in the alcohol business was to reduce consumption higher prices does that.We will have a higher degree of medical costs to the residents of this state as costs go lower. There is NO free lunch
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • anotherfencewalker wrote...
    Watch and wait..This could be interesting..
    May 23, 2012 7:27 am
    We may not get another chance to watch this kind of economics again. Taking a price controlled, product controlled government monopoly and releasing it to competition and capitolisim. This kind of thing is what we usually see in countrys who are leaving dicatorship or hardline government controls. Here's where we can watch American business in a competitive world "shake out". This could be good.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Fuego wrote...
    Pretty obvious...
    May 23, 2012 7:37 am
    that the free market will dictate price. Those stores that want to gouge will adjust the price or go broke. It's a simple formula gives the consumer the best product at the best price.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • messiah101 wrote...
    In some States the private sectors form their own monoply
    May 23, 2012 7:42 am
    Bar and restaurant owners often pay distributors more for product then if they purchased it at the local bottle shop.The state liquor control insures that they MUST buy from licensed distributors so the public pays more
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Annie (1) wrote...
    Convenience
    May 23, 2012 7:38 am
    To be honest-for me at least-cheaper prices wasn't the reason I voted for this initiative. The price is what it is-and while I don't expect my local grocery store will carry a huge variety of liquors(for that I'll probably still have to go to a stand alone store) but if I just need to pick up a bottle of vodka etc.it will be so much more convenient. I do know that in California for instance the grocery stores there will have "sale" prices on liquor-so if that happens here it will be a bonus-but for me convenience trumps price.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • BigGovSux wrote...
    Well said.
    May 23, 2012 7:39 am
    This will be an interesting lesson to those that believe the government should "do more". Time to pull up a chair and watch the free market in action. My only fear is these "new fees". I'm afraid they will be used to keep prices high (by government) in order to raise even more revenue. And ultimately to be able to say "see, it was much better when the state ran it".
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • CH wrote...
    And the middle finger go's to the . . . .
    May 23, 2012 7:41 am
    WSLB.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • TigerSGT wrote...
    gotta love being retired military
    May 23, 2012 10:57 am
    i dont have to worry about any of that crap....i get mine stuff from post! cheaper than anywhere, always. suckers.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • TigerSGT wrote...
    i get stuff that cant be sold in WA
    May 23, 2012 10:58 am
    the federal law trumps state law, so I win. i get the stuff WA says no you cant sell. But i got it on my shelf.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Me and You wrote...
    price
    May 23, 2012 12:35 pm
    1/2 the cost no. What they have we do not (A STATE INCOME TAX)Will we now to make up the $400 mil. the state just lost? Will freddy or safeway keep that money in state?
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • messiah101 wrote...
    Me and you
    May 23, 2012 12:43 pm
    That money will easily be made up in increased sales.That money will be kept in State because it will come from increased tax revenue as well as addional jobs
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • { "Thumbs Up":"1","Thumbs Down":"-1" }