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Seattle Kitchen: Jury is still out on privatizing liquor sales

BY Jamie Skorheim  on June 22, 2012 @ 9:09 am (Updated: 8:29 pm - 6/22/12 )

cedargrove

Starting on June 1, liquor sales in Washington were handed over from the state to private businesses. What has that done to the bottom line at restaurants? (AP Photo/file)

At the beginning of this month, liquor sales were handed over from the state to private businesses. As restaurant owners, Seattle Kitchen Show hosts Tom Douglas and Thierry Rautureau, say they're still keeping an eye on how the switch will impact their bottom line.

"It's a little bit of a transition time. I think a little bit more time under the belt will tell us what the outcome is," says Rautureau.

One thing he noticed right off the bat though was a few more lines on his liquor invoices.

"At first it was scary because it starts with a number, and then there's two more numbers added to it," says Rautureau. "Then on the bottom, you're like 'holy cow.'"

The initiative imposed an additional 10 percent distributor fee and a 17 percent retail fee on spirits to reimburse the state for millions of dollars in lost revenue.

Even though he had sticker shock at first, Rautureau says when he compares his price per ounce now to what he paid when purchasing liquor from the state, it's actually not that far off.

"You go back to your old invoice and you go, 'oh no, it's the same thing it's just written differently,'" says Rautureau.

Co-host Tom Douglas says he enjoys seeing the state fees right out there in front of him.

"I think it's kind of interesting to see what the state is collecting. Because when you just pay $30 for a bottle of booze, you don't know the mix," says Douglas. "It gives me an idea of where the bottom line price is, and what's going to our state."

The state had controlled liquor sales in Washington since the time of Prohibition, and while Douglas says he has no problem with the state being responsible with enforcement of liquor licenses and regulations, he thinks voters approval of Initiative 1183, putting the sale of liquor back in the hands of private companies, was a good move.

"I'm thrilled of the change. It never made sense to me," says Douglas. "The idea that somehow or another only the state had the wherewithal to sell me a bottle of Jack Daniels always kind of rubbed me the wrong way because it just wasn't that way with anything else, not cigarettes, not wine, not beer. It was a nonsense."

Meanwhile, supporters of I-1183 have filed a lawsuit challenging the state's rules for implementing it, claiming that liquor regulators circumvented the measure by arbitrarily restricting wholesale distribution and pricing of wine and spirits.

The complaints do not directly relate to liquor prices for consumers, but instead center on Washington Liquor Control Board rules that restrict retail sales to restaurants and distributors' deliveries, among other things, and that plaintiffs contend benefit large, out-of-state distributors.

Initiative 1183, allows stores larger than 10,000 square feet and some smaller stores to sell spirits. The measure was the costliest in state history thanks to a $22 million investment from Costco.

Under the measure, no single sale from a retailer to a restaurant can exceed 24 liters. The Liquor Control Board interpreted that language as 24 liters per day, and the lawsuit challenges that ruling.

A coalition of initiative backers, including the Washington Restaurant Association, the Northwest Grocery Association and warehouse giant Costco Wholesale Corp., filed the lawsuit Thursday in Thurston County Superior Court.

The Liquor Control Board said in a statement that it was still reviewing the lawsuit. But it called the plaintiff's message "one-sided and inaccurate" and said the rules were adopted as the soundest legal interpretation.

Seattle Kitchen can be heard on 97.3 KIRO FM on Saturday at 8 a.m., Sunday at 10 a.m. Available anytime ON DEMAND at MyNorthwest.com.

By JAMIE GRISWOLD, MyNorthwest.com Editor
The Associated Press contributed to this report.

Jamie Skorheim, MyNorthwest.com Editor
Whether it's floating on Green Lake, eating shrimp tacos at Agua Verde, or taking weekend drives out to the Cascades, she loves to enjoy the Pacific Northwest lifestyle as much as humanly possible.
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Comments (12)


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  • rational wrote...
    increased taxes?
    June 23, 2012 10:32 am
    I don't drink liquor so I'm not sure what the tax rate was before, but I was in the grocery store recently and someone was buying a bottle of liquor and balked at the price and the clerk informed him that there is a tax rate of over 20% on liquor sales now. So what was the tax rate when WA state ran the sales? I suspect it was the standard state sales tax rate, was it not?
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  • RacerTodd wrote...
    re: increased taxes?
    June 23, 2012 3:02 pm
    My recollection is that the 20% tax on booze was there prior to I-1183. I-1183 added an additional per liter tax paid at the time of sale and new taxes on the distributors.

    Also, the state stores showed the price with tax included, whereas now the private stores show the base price, with taxes to added at checkout.

    So people see a price of $20 on a bottle that was priced at $25 at the state store but at checkout they find there is $8 of tax and their total price is higher than before.

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  • rational wrote...
    RacerTodd
    June 23, 2012 3:34 pm
    The guy was buying something that was $50, so he was a bit startled to discover the 20% tax on top...and as English wasn't is first language it looked like the clerk was having difficulty in getting the explaination across.

    As I mentioned, I don't buy licquor, so I wasn't sure if it had a high tax on it before or not.

    As tuleman003 noted, the ability to purchase at most grocery stores now will save gas and time in not having to drive to a state store.

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  • CH wrote...
    Lowest Restaurant Prices wins! . . . .
    June 23, 2012 1:53 pm
    is our bottem line.
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  • Me and You wrote...
    YA STILL OUT
    June 23, 2012 5:28 pm
    Reataurants got 28% discount under the state system. Now lost that and get 1183's 27% in fees. Real hard to see if they our better off.And yes the state taxs was there no change. It was not the state that wan'ted out.
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  • tuleman003 wrote...
    Wa. State always going to get their cut.
    June 23, 2012 3:10 pm
    Bought liquor today for the first time since privatization. Paid 20 cents more for a bottle of rum, but saved that much and maybe more by not having to fight traffic (stupid Puget Sound drivers) to go to the Liquor Store.
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  • ottmilkr wrote...
    Working people are cutting their own throats
    June 23, 2012 4:47 pm
    Working people are their own worst enemy. They voted this in which eliminated a lot of good UFCW jobs. Working people de certify Union shops and give their power away. Working people are basically stupid...and the wealthy benefit as they have been for the last 30 years.
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  • Troll Hunter wrote...
    Voters, or Costco?
    June 23, 2012 5:58 pm
    Sure voters okayed it, but only after a $22,000,000 Costco funded propaganda campaign. Were they stupid to do so? Only time will tell i guess. I don't drink or smoke so these sort of things are all but meaningless to me; but I have wondered myself about the taxes now on alcohol. A c-store owner told me that beer and wine prices are going up quite a bit real so as a result of this, so I tend to think the state is trying to screw the public once again. I saw on a friends receipt that the state charges the $3-something liter fee, a 20% tax, plus the 8+% state sales tax on top of that. He ended up paying almost 100% of the base price in taxes for a $6 bottle. As for the unions, are they part of this liquor discussion? Unions quite honestly are a two headed beast, both good and bad for the common worker. Sure they were the savior for the workers back in the day, but the modern unions often times cause as many if not more problems for the worker than they solve.
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  • Burn_Notice wrote...
    The UFCW?? Now that is funny.. Biggest Joke of a Union
    June 23, 2012 5:15 pm
    If you're in the UFCW you better pray you don't end up needing their support come CBA enforcement time.
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  • ottmilkr wrote...
    Again workers are
    June 23, 2012 6:04 pm
    their own worst enemy. Back stabbing , brown nosing management is one thing as scab labor, but I see it in Union shops. Management loves that. The workers are the Union, I ask checkers quite often what their Pension is like, few have a clue. Well, people will get what they get I suppose. I think it has to get to where people were during the real depression for people to really figure it out.
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  • awbitf wrote...
    Remember
    June 23, 2012 8:08 pm
    the state used to mark up the price by 53%.

    Yes, it didn't drop as many had thought, and most of that seems to be due to the distributors, but the Litre tax is pretty lame too.

    If the price is a wash, but purchasing is more convenient with better selection, then consumers win.

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  • tuleman003 wrote...
    What ticks me off
    June 24, 2012 1:28 am
    about some of my fellow Americans is. They don't really want to WORK, they just want the perks and prestige of being a business owner.
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