A group representing the owners of Washington’s former state liquor stores says unfair competition is smothering their business and they want the Legislature and the Washington State Liquor Control Board to enact new rules to put them on an equal stance with larger competitors.
The Washington State Liquor Store Association, which represents about 80 small liquor store owners, has hired a lobbyist to carry its agenda to lawmakers. Tom Dooley of Principled Solutions will represent the liquor store owners.
Jas Sangha, the association’s president, said both small-business entrepreneurs who bought former state liquor stores and former contract liquor store owners are being forced out of business because the rules surrounding liquor privatization put them at a significant disadvantage.
Sangha said that if a significant number of the former state stores are to survive, the Legislature will have to alter the rules that govern liquor sales in the state.
The association, for instance, says most of the former state stores’ business in supplying bars and restaurants has been taken over by the liquor distributors. Those distributors under the present laws are allowed to sell direct to bars and restaurants without paying the 17 per cent fee on gross sales that store owners pay. And, the liquor association president claims, some distributors are selling to bars and restaurants at a lower cost than they sell to the former state liquor stores, though there are no cost advantages for the distributors to sell to bars and restaurants compared with the smaller former state stores.
The Liquor Board also has enacted a 24-liter rule that allows retailers to sell only that quantity of liquor to any single customer in a single day. Distributors are not similarly restricted.
The former state store owners will ask the Legislature to enact legislation to streamline their ability to form a co-op that can buy collectively from liquor distributors to obtain quantity discounts.
Another item on the association’s agenda is permissive legislation to allow liquor retailers to conduct liquor tastings.
The state’s small distilleries are allowed under the law to sell directly to retailers, but developing a client base for their new offerings requires efforts to expose liquor users to their new brands.
“Our customers are more than happy to taste a sample of a new whiskey, but they’re unlikely to pay $30 for a bottle if they’ve never tasted it,” said Sangha.
Sangha said dozens of those store owners who won bidding for the state stores last spring have already gone out of business.
Those business people paid the state some $31 million last year for the right to operate the former state stores once the state gave up its monopoly on liquor sales June 1.
The state’s exit from the liquor business was the result of voters’ approval in 2011 of Initiative 1183. That initiative resulted in the number of spirits outlets in the state quintupling to more than 1,500 stores. The former state stores were the only spirits outlets allowed under the initiative to be under 10,000 square feet of space.
But hundreds of groceries, drug stores, discounters and chain liquor retailers sought and received liquor sales licenses and are now competing with the former state stores.
John Gillie: 253-597-8663john.gillie@thenewstribune.com
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