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Liquor board, stores brace for new world

Post by Jordan Schrader / The News Tribune on Nov. 9, 2011 at 10:53 am with No Comments »
November 9, 2011 2:35 pm

The state Liquor Control Board will have to shut down the 166 stores it runs and shed more than 900 of its 1,400 employees. Not surprisingly, board members are “deeply disappointed” by voters’ backing of Initiative 1183, they said in a news release today.

Joe Gillium, center, and other I-1183 supporters declare victory. /AP PHOTO BY ELAINE THOMPSON

Another 162 contract stores that are agents of the state in less populated areas will have the chance to stay open, but they face a degree of uncertainty. The stores have to get approval from the liquor board, they don’t know whether competitors will move in nearby, and they worry customers may make the extra drive to a big grocer.

The general manager at DuPont’s contract store worries about Costco, which has a store eight miles away in Lacey. General manager JiHyun Pang says there’s clearly a reason the retailer contributed $22 million to I-1183.

“They know they can make money. That’s why they did it,” Pang said today.

Pang also wonders if more small stores will pop up nearby. Stores smaller than 10,000 square feet will need the liquor board’s blessing to sell liquor, but Pang wonders if new stores and the tax revenue and license fees they bring will be irresistible to the state. “It’s making me worry. I don’t know what’s going to happen,” said Pang, who opened the store just nine months ago.

Joe Gilliam, president of the Northwest Grocery Association, which represents large grocers like Costco, predicts the former contract stores will be the only game in town when it comes to small stores.

“Any new outlet is going to be a grocery store,” Gilliam said as results rolled in Tuesday showing his side winning by a three-to-two margin.

Small grocers have worried about the big stores’ ability to take advantage of I-1183’s new rules allowing volume discounts and bypassing distributors by using central warehouses. But Gilliam said there will be a level playing field. Small grocers will be able to pool together for warehousing of alcohol as they do now for other items, he said, contradicting opponents’ claims that such a partnership would be banned.

“There will be some changes for them to make, but they will have the same opportunity to compete with liquor as they do with milk or frosted flakes,” Gilliam said.

The liquor board will be key in working out many of these details. It will still have plenty of work for its remaining employees, regulating more than 16,000 businesses with a liquor license.

The board is now working on a plan for starting a shutdown in January and finishing by June 1.

Chairwoman Sharon Foster and board members Ruthann Kurose and Chris Marr said in their statement that employees

have been working under the cloud of initiatives for nearly two years. Despite operating under a microscope, they have carried out their responsibilities with dignity and professionalism. We owe our employees a debt of gratitude for the professional way in which they have conducted themselves during a difficult time.

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