June 1st = Liquor in Grocery Stores

Something’s coming to the state of Washington this Friday, June 1st, 2012 – and it will be interesting to see the reaction of folks. For, oddly enough in this day and age, liquor seems to be a bone of contention. And not just in terms of trade protectionism, taxes, duties, imports and exports (think of the difficulty in finding BC booze in WA, for example). Here in Washington, it appears to have been an anachronistic moral battle to the end.

Or was it a money battle?

In reality, the laws as they pertain to alcohol have been rapidly changing in this state over the last few years, with everything from the repeal of certain three-tier tied house laws (laws which regulate the relationships among the three tiers – supplier/manufacturer, wholesaler/distributor, and retailer – and which date back to when there was a “tie” among these levels that led to an excess supply, which in turn led to the development of “illicit activities” for additional revenue) to out-of-state wineries shipping direct to WA resident consumers, to how much home brewed beer one can remove from one’s home.

Washington’s initiative to privatize the distribution and sale of liquor and thus remove it from the hands of the state seems to be an ending to a long history of alcohol control that dates back to the days of Prohibition, which lasted more than 10 years, from 1920-1933. (BTW, if you haven’t already done so, be sure to check out the three-part, five-hour-plus documentary series Prohibition by Ken Burns and Lisa Novik, which aired on PBS and is also available on hulu).

When I-1183 passed by 59% in the November 2011 general election, it got the green light to be enacted into state law. In response, its opponents filed a case in Washington Supreme Court claiming that the initiative violates article II, section 19 of the Washington State Constitution (i.e., single-subject and subject-in-title rules). The ruling in that case came down today: they lost. The Washington Supreme Court upheld the constitutionality of I-1183 in a 5 to 4 ruling. (To delve into the legalities further, see Peter Callaghan’s article, “Washington Supreme Court upholds validity of private liquor initiative I-1183” in today’s Tacoma’s The News Tribune, which makes the entire 29-page decision available).

The result of all of this hub bub? Starting June 1st – just several hours away – Washington’s stores that are larger than 10,000 square feet in size can sell spirits, apparently at “sticker shock level” higher prices. Once the taxes and fees are incorporated into the price (never mind the mark-ups), the final cost to consumers is hefty. To start, thanks to I-1183, there’s now a 10% distribution fee and a 17% retail fee. These fees are combined and make the shelf price. Then, there’s a State Spirits Sales Tax (20.5%) and a Spirits Liter Tax (prorated according to volume, with $3.77 for a 1 Liter bottle).

It adds up. Quickly.

For example, let’s say one liter of spirits (including the 27% of fees) is valued at $9.99. Once the additional 20.5% and $3.77 are added in, the final cost to the consumer is $15.81.

Sure, technically speaking I-1183 was about privatization, not pricing; check out Peter Callaghan’s recent article in the Bellingham Herald, entitled “Lower liquor prices were never the point of I-1183.” But at it’s heart I-1183 wasn’t about morality, either, but rather, money. And the bigger the store, the better the financial bottom line (think Costco). Not to mention Washington State wanting it’s fair share: sales-based fees are anticipated to provide $10 million annually to local governments to go towards public safety programs.

Yesterday, I found liquor-licious flyers in my mailbox from Safeway, QFC, and Thriftway; I’ve also recently received a press invite to attend a “top secret launch party” (that’s really open to the public) from midnight to 2:00 a.m. tonight at the Uptown (1st and Mercer) Metropolitan Market to celebrate the sale of spirits, complete with local distillers on-site.

Just in case you’re looking for a party, dear hedonists … no matter the facet of I-1183 you wish to celebrate (or mourn).

Note: In order to comply with FTC Act 16 C.F.R. 255, Heed the Hedonist would like to disclose that it does receive media “comps” and/or media discounts – but not in exchange for favorable coverage, or for withholding unfavorable coverage, of the given venue/meal/performance/product/service.