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We’re better off without I-1183’s liquor privatization

Post by TNT Editorial Board / The News Tribune on Oct. 22, 2011 at 6:03 pm with 9 Comments »
October 21, 2011 3:06 pm

This editorial will appear in tomorrow’s print edition.

A year ago, the editorial board of The News Tribune endorsed a measure that would have privatized the sale of liquor in Washington. We all make mistakes.

We endorsed last year’s Initiative 1100 because it was clearly better than a competing privatization scheme, Initiative 1105. By a split decision, we also concluded that selling liquor simply wasn’t a core function of state government.

That was philosophy. We’ve since been swayed by practical reality. The reality is that dramatically expanding access to distilled spirits – which this year’s Initiative 1183 would do – is bound to have social costs that outweigh the benefits of privatization.

We’re also not enamored by the spectacle of a single company, Costco, attempting to purchase an election and buy a state policy that would pump untold millions into its bottom line.

I-1183 is tailored to favor large-volume buyers of wholesale whiskey, rum, etc. The initiative’s value to Costco – one of the kings of volume purchasing – is such that the company has so far invested more than $22 million in the campaign to pass it. This constitutes nearly all of the money behind I-1183.

Costco has now become – by far – the largest single contributor to a ballot measure in state history. (The largest was the American Beverage Association, which spent $16.7 million repealing a soda pop and bottled water tax. The third largest? Also Costco, which spent $4.8 million trying to enact last year’s I-1100.)

We like to think Washingtonians’ votes can’t be bought.

The best argument for I-1183 lies in the virtues of a free market. Privatization is likely to increase sales, produce more revenues for state government – and it might reduce prices for consumers.

If we were dealing with almost any other product – say, Wheaties – that would be persuasive. But if one assumes that the consumption of hard liquor has serious downsides, there’s good reason to limit excessive consumption by restricting the number of outlets and their hours of operation. In other words, by keeping sales to state-controlled liquor stores.

The downsides are self-evident: Drunken driving, alcoholism, domestic violence, cirrhosis of the liver and other diseases, higher health care costs and on and on.

Earlier this year, a task force of the U.S. Centers of Disease Control reviewed the scientific studies of privatization.

“Increased alcohol outlet density is also associated with increased social harms,” it concluded. And: “The maintenance of government control of off-premises sale of alcoholic beverages is one of many effective strategies to prevent or reduce excessive consumption, which is one of the leading causes of preventable death and disability.”

Washington state does seem stuck in a post-Prohibition, New Deal regime of liquor regulation. Having reconsidered the alternatives, we’re just fine with that.

Leave a comment Comments → 9
  1. steilacoomtaxpayer says:

    Um, I am sure that you remember that Paul Allen purchased an election and the voting process to get Clink funded. So, what’s new?

  2. jimkingjr says:

    I like single malt scotch. I know that Costco will NOT offer the wide variety of quality products now offered in the state liquor stores. That is enough reason for me to vote NO! Pure self-interest on my part that even $22 million can’t sway…

  3. plainjane98406 says:

    This editorial completely ignores the most important reason to vote yes on I-1183, how much potential revenue the state and Tacoma gain by voting yes. It’s $400 million in ADDITIONAL revenue — above what the inefficient state-run system currently brings in — for the next 6 years statewide. The state’s own estimate for the added revenue to Tacoma alone is $8.3 million for the same 6 year period. How could this editorial board have to failed to even mention that when on these same pages the proposition to fund an important integrated 911 system is being debated? I-1183 seems to give cash-strapped beancounters a third option.

  4. Wow. Way to go, TNT. You’ve completely ignored the impact of SB 5942 in your opinion. For those who still don’t know, 5942 was written (in part) by political lobbyist Tom Luce, who runs the Washington Beverage Company, a group of lobbyists looking to own the state’s monopoly on liquor distribution. A company by a similar name, the Maine Beverage Company created an absolute disaster for their citizens, resulting in locked in government revenue streams and the highest prices in the region for customers. The Maine legislature is tied up in legal battles that are certainly part of our own future if people believe this is all about Costco. It turns out, the Washington Beverage Company is the only qualifying respondent to the RFP. How coincidental, especially given that the Washington Beverage Company is headquartered in Tacoma, WA.

    It also fails to realize that privatized liquor sales are perfectly legal in 42 other states, none of which have a statistically significant difference in alcohol related problems. And it fails to recognize how much revenue is lost to out of state sales as a result of this. If Washington lost half as much as Oregon estimates (despite twice the population), we’re losing enough revenue in taxes every day to pay for a new starting salary police officer. Oregon estimates 1,100 cases a day. Do that math.

    A no vote on 1183 does not return us to status quo. The only way to repeal 5942 (passed and signed by the governor with an emergency clause to prevent a referendum) is to vote Yes on 1183.

  5. serendipity says:

    I do not want to see members of our community have more access to alcohol. The impact on the increased number of DUIs, particulary by teens who die more often from drunk driving accidents than anything else is reason enough to say no to this initiative.

  6. The less competition there is, the less of any chance to see a price reduction for any product being sold.This has been a rule for centuries.Why do you think people buy certain items from other states?I have not seen any figures on how much profit has been made from the States Liquor stores,or is that a state secret?Competition is almost always in the consumers favor, so why not give the consumer a break and create more competition.I don’t drink,but will vote for 1183.If the popoulance that believe that the defeat of 1183 will keep the teens from drinking and driving,they are out there in LaLa land.The teens will get their supply from somewhere and you take that as a proven fact!

  7. derekyoung says:

    Lesson learned, don’t touch JKJ’s scotch. :)

    Sincere – the state’s profits on liquor is public information. In fact one of the reasons for the opposition last year was the loss of this profit which is distributed between state and local governments. Costco created a replacement tax that makes this revenue neutral in theory – though in practice price elasticity makes it difficult to know exactly what its impact will be. It’s also the source of those phony “no on 1183″ ads that claim there’s a “new” 23% tax that will hit consumers.

  8. harleyrider1 says:

    Why is a government involved in “sales” of anything?

  9. Rollo_Tomassi says:

    harleyrider1 –


    it is ridiculous to have a state monopoly on any product, especially alcohol.

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