The Liquor Control Board on Wednesday finally revealed what it wants to do about the so-called “mini-mart loophole” that opponents of liquor privatization warned in 2011 would cause an explosion of small stores selling hard liquor.
The board proposed allowing small stores only in locations that are 20 miles or more from existing stores – a standard it figures would permit roughly 20 additional liquor shops in the state.
Such a strict buffer is sure to disappoint many of the 170 applicants for a liquor license under the trade-area exemption that Initiative 1183 provided.
Jill Prukop has been waiting more than a year for a response to her application.
Her store in Randle, Fischer’s Market IGA, sits halfway between the two nearest communities with places to buy hard liquor, Morton and Packwood. It has a meat cutter, a produce area, even a place to buy shirts and socks. But there’s one thing it doesn’t have.
“Customers come into the store and say, ‘Where’s the nearest liquor store?’ I say, ‘It’s 17 miles either way you go,’ (and they say,) ‘I guess we’re drinking wine.’”
During the 2011 campaign for state liquor privatization, there were competing predictions about what would happen after state stores closed.
From one side, voters heard
I-1183 would prevent convenience stores or mini-marts from getting into the liquor business. From the other side, they heard about a “loophole” that would lead to more than 900 small sellers.
The voter-approved measure limits outlets to 10,000 square feet or more — with two notable exceptions. One is for former state stores and contract stores. The other is for trade areas where no big store has opened.
Expansion of liquor stores under the board’s proposed definition for trade area would pale in comparison to what has already happened under privatization. Around the state, 1,428 stores sell spirits, more than four times the 329 that existed before the law passed.
“Access obviously isn’t an issue” statewide, liquor board Chairwoman Sharon Foster said before voting to propose the rule. “But it is an issue in some of these areas that we’re going to try to serve.”
Foster and Ruthann Kurose voted to propose the rule, while Chris Marr was absent. Now a public process starts that will give people the chance to weigh in with written comments through April 24 and a public hearing on that day. The board would finalize the rule on May 1, and it would take effect June 1.
Among those watching closely are the people who bought the rights to the former state stores at auction for a collective $31 million. They want the greatest possible distance from competitors paying less than $200 for a license.
“I am 100 percent positive that the auction would not have gone at that level” had owners known about all the competition they could face, said Tacoma store owner David Cho. A 20-mile radius “would only harm their business,” he said.
Many stores have gone out of business. Some owners of the rights have been unable to open. The president of the owners group, Jasmel Sangha, said the buffer zone should apply to all the locations where rights were purchased, even if the stores aren’t open.
On the other side are small stores like Prukop’s. The Washington Food Industry Association, which represents small grocery stores, says 20 miles is too much.
Association CEO Jan Gee said the board has been reasonable about taking new information into account, so she would bring board members market research showing how business owners decide if an area is underpopulated enough to open a store.
“That’s why we have privatization, because the consumer said, ‘This is ridiculous,’” Gee said. “So now we’re creating pockets of the state that don’t have the convenience the public voted for.”