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I-1183: Should Costco run state liquor business?

Letter by Denise Griffin, Puyallup on Oct. 19, 2011 at 11:11 am with 28 Comments »
October 19, 2011 11:12 am

The voters of this state have made it clear we want the state out of the liquor business, but my understanding was that private business people would work with the state to take over the existing stores.

We do not want increased access, and we do not want to dismantle the distribution system that allows stable costs. We also don’t want to put more than 1,000 people out of work.

Just because other states do it differently, doesn’t mean this system does not work in Washington state. Costco and others have no business telling us how to provide alcohol, be it hard alcohol, beer or wine. With the increase in membership fee, am I helping pay for Costco’s pro-1183 campaign? I may no longer be a customer of Costco.

Leave a comment Comments → 28
  1. SadujTogracse says:

    Since when did selling and distributing alcohol become an essential state service? Let private business focus on what they do well and lets streamline our state Government which includes cutting things like this.

  2. Since when was there a law about “essential state services” or is that just a slogan of the Right Wing Sound Machine.

    The state is making money on liquor sales. That money pays for programs for taxpayers. The system works.

    There is no need to hand the bank account over to major retailers.

    Haven’t taxpayers given enough to big businesses with subsidies and tax relief?

    There is no need to cut profits that provide jobs and programs.

  3. SadujTogracse says:

    Except it will bring in more revenue for your jobs and programs. In fact it will bring in so much more that Gregoire would be able to go on a new junket every month if she were still in office!

  4. I think AlabamaGeorge schooled you quite well on the reality of the financials concerning this issue.

    Maybe if Gregoire went to more junkets, she could bring home more jobs, as she did in Paris. Ask the man in Spokane.

    Tell you what, since the attention span of a Conservative is quite short, I’ll look up George’s Privatization Losses 101 syllabus and post it again…..

  5. For those who missed it…and for those denying it…

    AlabamaGeorge says:
    Oct. 17, 2011 at 6:13 pm

    Mr. Saduj Togracse –

    Since you persist in this message, I took the time to look up some things on the Liquor Board website. From their annual report:

    Gross Revenue – $877.77 million

    Markup – 28% this is the gross profit after purchase/from selling

    Gross Profit – $245.78 million, money that the state will not see if not in the sales business.

    Cost of retail operations – $86.61 million.

    Net profits lost, after deducting cost of retail – $159.16 million

    On Saturday, you claimed that the OFM said there could be an increase of up to $42 million in 6 years if privatization takes place. Did they explain how they will make up the loss of nearly $160,000,000 per year before increasing revenue by $42,000,000? The math just doesn’t seem to compute. It would seem that we taxpayers stand to lose $1,470,000,000, as opposed to gaining $42,000,000. This is providing that unit sales do not increase or decrease substantially.

  6. SadujTogracse says:

    Kard, you’re getting quite good at that copy and paste thing! To bad it doesn’t mean anything!

  7. taxedenoughintacoma says:

    Washington has the highest liquor taxes in the nation allowing the government to mandate massive markups from distiller to wholesaler, and from wholesaler to retailer. This is a socialistic scheme and bureaucratic briar patch.

    Would greater access to liquor increase illegal sales to minors? That’s another dire warning you’ll hear on frantic TV and radio commercials. But the truth is, I-1183 actually increases punishment attached to state liquor regulations. If passed, it would double penalties for selling booze to minors. This is a good thing.

    Washington’s antiquated state monopoly of the liquor and wine business is rooted in the distant past, bolstered by attitudes that were born during the era of prohibition. It’s time to bring that system into the 21st century, to recognize that booze is both a thriving business and a legitimate concern. In the first case, let the marketplace rule. In the second case, let the state government regulate and enforce. But we shouldn’t depend on the government for both.

    There are NO downsides to this passing other than 1100 state workers will have to get a real job and state worker unions will lose $$$$ from the forced union dues they must pay. I want smaller government and this process is a good deal for the taxpayers.

  8. “There are NO downsides to this passing other than 1100 state workers will have to get a real job and state worker unions will lose $$$$ from the forced union dues they must pay. I want smaller government and this process is a good deal for the taxpayers.”

    The loss of the 28% markup that George outlines is a pretty substantial “downside”….but it appears that “Taxed” is doing the same fingers in ears trick…

    I guess moving freight (what Costco workers do all day) isn’t a REAL job, huh?

  9. redneckbuck says:

    If the state was at all concerned about DUI it would get tough. What we have now is a joke. You pay a lawyer and get a slap on the wrist. I say take the jerks car from them.

  10. An associate of mine got a DUI (procecuted by the county, not state).

    His license was suspended until completion of his diversion. THEN he had to pay for a breathalyzer attached to his ignition that was set to detect ANY alcohol. Every 20 minutes (give or take) it would beep and he had to blow into it again. This lasted over a year.

    An old saying “locks are made to keep an honest man honest”. You’ll never stop a criminal from his desire to break the law.

    Maybe you’d prefer the European “life in prison”….if the tax base can handle the incarceration costs. Oh yeah…can’t raise taxes.

  11. Going to the original letter, exactly how have the voters made it clear that they want the state out of the liquor business? Wasn’t it just last year that they voted NO, twice to proposals to get the state out? That doesn’t seem to me like a resounding vote of no confidence.

    Even now, it’s taken a campaign funded by $22 million to get the initiative as far as it has, and apparently that’s just from Costco.

    If the voters were so against the state in the liquor business, you’d think that Costco could have bought its law a lot cheaper.

  12. Another miss inform person nowhere is it written that all the current employees will be laid off and it’s obvious she doesn’t watch( I believe it was ) king 5 investigator segment on where the state liquor warehouse is losing millions of dollars. It’s obvious Costco can run a warehouse/ distribution millions of dollars better.

  13. daggercat says:

    I made the assumption, that since the vote was so close last year, that people would like to see the state out of the liquor business, but with private enterprise taking over, and our distribution system remaining as is, as well as the cost controls. Even if we have higher cost for alcohol than other states, that’s because we’ve chosen to fund our state government with taxes on alcohol. I’m sure other states get this funding from something that is more expensive in their state than here. That being said, state liquor store employees are not the only potential job losses. There would also be loss in distribution, and I don’t care what people say, but a lot of small businesses will be affected. I call it the Walmart effect. And, no, I don’t shop there or at Sam’s club. The smaller “niche” stores I used to go to are gone because they can’t compete with CHEAP. And I mean that in every sense of the word.

  14. Another miss inform person


  15. Again…someone reported my comment analogy about Saduj’s denial of Alabama’s analysis being not unlike plugging one’s ears and saying “alalalalala”.

    Maybe if Saduj has numbers to prove George wrong, a submission would be in order. Saying “it doesn’t mean anything” is just intellectually dishonest.

  16. daggercat says:

    Taxedenough, “let the marketplace rule” upsets a fine balance unique to this state that allows hundreds of small wineries and breweries to thrive and for people to make a living in the distribution business. And Toocan, I watch and read a variety of thought provoking articals. Did you see the report that says they really can’t tell, when all is said and done, whether the consumer will actually see much cheaper alcohol, if it might actually cost more? Or how about the report that says Washington State has one of the highest DUI arrests in the nation. Sounds bad, unless you ask yourself: does the high arrest rate have to do with more irresponsible heavy drinkers in Washington, or the fact that our state takes drunk driving very seriously and puts money, time and attention into emphasis patrols to take drunks off the road? Is there a report somewhere that says the state is losing money being our alcohol purveyors? If they’re losing money at their warehouses, they must be making it up somewhere else. In fact the more I think about it, I’m not sure I want the system privatized at all. I think the state is doing a fine job. But if the state must get out of the business, let it be done with much more serious thought to what would best work for Washington State! Once an initiative is put in place, it’s next to impossible to reverse course if it was a mistake. Kind of like the mandatory minimum wage increase. I could smell that one backfiring…

  17. jeniceglassman says:

    Hello, I have a “real job”. Have had for 15 years. The chuckles today are assertions “its just a beverage” It is a drug used often by people to self medicate. Double the penalty for sale to a minor? It’s not the sales that put it in the hands of minors as often as the theft. You can choose to discount what I know from being a clerk. It’s America, you can vote how you feel. But disdain of a job you are unable or unwilling to do is childish. Lets also be clear about what happens if this passes. All state store close on June 1st and all store staff become unemployed. There is no magic booze fairy that softens this blow. Time to go get ready for my fake job.

  18. “let the marketplace rule” upsets a fine balance unique to this state that allows hundreds of small wineries and breweries to thrive and for people to make a living in the distribution business.

    Funny how small California wineries and breweries manage to thrive without state-run liquor stores…..are you suggesting WA wineries and breweries are inferior?

  19. It is a drug used often by people to self medicate.

    Got any evidence to support that assertion?

  20. oops….misread your quote, thought you wrote most often used to self medicate.

    That being said…..sometimes self-medication is better than what the doctors prescribe. Witness the depression drugs that lead to suicidal thoughts.

  21. daggercat says:

    Beerboy, the other post by jeniceglassman is not relevent to this discussion. If the breweries and wineries in California are succeeding, it is because of a finely interwoven web of rules, regulations, support. That wonderful ballet of government and private enterprise, that allow this to happen. Are you willing to upset our wonderful ballet? I’m not sure what you mean with your question about our wineries being inferior. This initiative is all about who gets the money.

  22. daggercat says:

    Ok, some of the comments by jeniceglassman are not relevant, except for the comment about the state workers being out of jobs on a certain date. That is a reality. They forgot to mention the job loses to distributors. And it’s not theft as much as legal, supposedly adult people, buying alcohol for minors that toss them a couple of extra bucks, that seems to be a problem. So let’s not have more outlets for the stupid people…By the way, I work in alcohol distribution, and I have very strong feelings about availabilty, education and enforcement. I’ve seen that alcohol can be used recreationally, and I’ve seen it used destructively. I firmly believe that it should have the controls that a mind altering substance deserve.

  23. I firmly believe that it should have the controls that a mind altering substance deserve.

    Which is why the State should not be profiting from the sales of alcohol – as it creates an obvious conflict of interest with their legitimate role in controlling alcohol.

    Just like the various fed agencies that are set up to boost the mining/oil, etc industries while regulating them….ultimately something gives – usually on the regulatory side.

  24. daggercat says:

    The state profits from the sale of alcohol regardless. Taxes are collected from whoever is selling the product. If you say the states interest should be with controlling alcohol, then a great deal of control will be lost if that many more stores are able to sell alcohol. Right now, our liquor control agents (for hard alcohol) need only keep tabs on less than 500 stores. If this initiative passes, there will be more than 1000 outlets. Stands to reason more staff would be needed for enforcement. I am still a firm believer that if we change our model for selling alcohol in this state, we keep many of the constraints in place and do not allow expansion of outlets. Call me naive, but the tidal wave of effects on other aspects of our economy, just to give Costco the right to bypass distributors, will be felt for years. Sorry, but my feelings are really strong on this one.

  25. We also don’t want to put more than 1,000 people out of work.

    Are you claiming that Costco (and others) will be able to do the same job as is currently being done by 1,000 workers without any additional hires?

  26. stumpy567 says:

    Kardnos, get the facts about this issue. You clearly don’t know it all.
    Read the General Election voter’s pamplet page 20-21 Fiscal Impact Statement. Written by the office of financial management.
    Increases in both General Fund and Local revenues and a one time
    revenue gain from the sale of the state distribution center.
    Anything the state can do the private sector can do better and at a lower cost. Sure the state LCB will tout all the benefit we gain from their antiquated, monopoly on the liquor business in this state.
    They want to preserve their positions and pay. Think about it. Why would the liquor distributors want to defeat this measure. They have no competition. the state pays whatever they ask.

  27. daggercat says:

    Beerboy, I’m starting to think you don’t see past the end of your nose. It’s easier to absorb extra product into an established system. You make your people work a bit harder. And stumpy, the state WORKS WITH distributors to set prices on a month to month basis. The distributors don’t tell the state what price to set. They actually work WITH eachother.

  28. It’s easier to absorb extra product into an established system. You make your people work a bit harder.

    Your argument for the State controlled system is that the State hires 1,000 workers that Costco, etc wouldn’t have to because the State is inefficient and has low productivity.

    Hardly a winning argument for Libertarians/Tea Party/Republicans…..

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