Last year’s liquor privatization initiatives may be long dead but the push to privatize Washington’s state-run system is clearly alive and kicking: State Senator Tim Sheldon (D-35) recently agreed to co-sponsor a liquor privatization bill drafted by Costco that would get the state out of the liquor-selling business by September of 2012.

“The state is coming up with gift cards at liquor stores, we’re creating stores inside of stores to try and squeeze out more revenue and it’s not working,” says Sheldon. “That public doesn’t want gimmicks, just convenience and safety.”

Although the measure has yet to drop in the legislature, it’s similar to last year’s Costco-backed Initiative 1100—which aimed to dismantle the state’s three-tiered system—with two key differences: Liquor licenses would only be awarded to retailers who operate in spaces larger than 9,000 square feet, allaying public fears that every gas station and neighborhood convenience store in the state would gleefully commence selling liquor to motorists and children. But it’s not just about promoting safety—the Costco-penned bill clearly favors big-name retailers (surprise!). As gloomy gus points out in the comments, many of the state’s current liquor stores wouldn’t qualify for a liquor license under the proposed legislation. For example, the liquor store on 12th and Pine Street is only 6,400 square feet.

It would also require retailers and distributors to pay a one-time fee to the state, averaging at roughly six percent of the licensee’s first five years of gross booze sales (instead of the flat $1,000 fee that I-1100 proposed). After that, retail licensees would pay $166 to renew their license, while distributors would pay $1,320.

“I think the citizens were confused about the details [of I-1100] but supportive of the concept,” says Sheldon. “This legislation moves forward and clears up those misconceptions.”

Like I-1100, the legislation would allow retailers to receive volume discounts from distributors. It also keeps state liquor taxes in place, which generate roughly $300 million a year for state and local governments.

While it’s a long shot that the legislation could get a hearing during the current session, Sheldon says it has a chance in the House’s ways and means committee if it helps mitigate a $5.1 billion budget shortfall. “It’s no secret we’re struggling on the state level,” says Sheldon. “This could be necessary to implement the budget if it generates revenue.”

Former Stranger news writer Cienna Madrid has been a writer in residence for Richard Hugo House, a local literary nonprofit. There, she taught fiction classes and wrote 4/5 of a book about a death-row...

20 replies on “Senator Sheldon Backs Costco’s Hail Mary Liquor Privatization Bill”

  1. With some minor changes, this actually doesn’t sound half bad. My understanding is this does a much better job on protecting the revenue that the State currently receives, and if instead of a one-time fee based on gross receipts the yearly fee was based on gross receipts for booze sales, even better! Throw in a specified amount of licenses for booze-only stores (places that would more likely cater to specialized orders for Fnarf), and exterior advertising restrictions, and it’s not half bad.

    Yes, there’s the issue of the workers that would lose their jobs in the current stores, but as noted, this isn’t going to even be considered until next year. With any luck, 2013, a new goal for implementation, will bring with it an improved economy, and the effect of the job losses won’t be as severe.

  2. Wow. This bill is so specific it should be called the “Cut Union Jobs to Give Walmart and Costco Execs Bigger Bonuses Bill of 2011.”

  3. Where else in the country have there been efforts to “generate revenue” or “reduce the deficit” at the cost of well paid union jobs? Hmmmm.

    But, if this bill MUST pass, I would like to see an exemption from the 9,000 sq ft. rule for business with a certain portion of their inventory/sales from liquor. This would allow small, specialty, stores, because NEWS FLASH, costco and other large stores are going to only carry liquor with high volume sales. Plastic bottles of rum? Yes. Micro-distilled or boutique liquors? Nope. As written this is only going to reduce the selection of liquors available. The size requirement will also do nothing to increase the availability of spirits in urban centers, where there are a limited number of stores larger than 9,000 sq ft.

  4. But, P.S. this shouldn’t pass, because it’s bullshit. I wish the stranger would drop their current “BUYING LIQUOR IS TOOO HARD” cry-baby demagoguery and, I don’t know, not support hand outs to huge companies that will enshrine anti-competitive restrictions by shifting the beneficiary of those restrictions from the state to large private companies.

  5. Liquor licenses would only be awarded to retailers who operate in spaces larger than 9,000 square feet, allaying public fears that every gas station and neighborhood convenience store in the state would gleefully commence selling liquor to motorists and children.

    And just happening to guarantee only the deeper pockets will become players, right?

    Honestly, the example I think of here is Meinert, whom I do give his share of shit. Him being able to rent one of those little storefronts next to the Five Point and sell some choice retail liquor would be just plain nice.

    But nooo, only a big store, thank you. The liquor store at 12th and Pine there is only 6,400 square feet, for comparison – too small under the proposed Costco law.

  6. @2 – the other big winners would be the Kroger stores, Safeway, Albertson’s, Haggen – all Union. Additionally, the larger co-ops, and employers with strong pro-worker histories (Trader Joe’s) would also see a benefit. And Costco is a great employer. Non-union =/= bad employer.

  8. @5, Thanks gloomy gus! I was digging to find the 12th and Pine square footage for comparison’s sake. I knew it was under 9,000…

  10. Gus – agreed with you.

    I think we should move towards privatization, but this bill is pretty transparently about Costco making billions while the State gets little and the small independent retailers get screwed. The bill itself could be fixed, but that’s assuming Costco wouldn’t object to that and we know they would.

    Someone in the Legislature needs to get their act together and write a decent privatization bill that favors small independent businesses over the massive big box guys on all levels, from small grocery stores and specialty liquor stores, so small bars and restaurants.

    Unfortunately, the Dems aren’t the party of small business any more than the R’s. Though the Dems could start to prove me wrong by actually taking action on this issue instead of letting Costco write legislation.

    Any electeds out there ready to lead?

  12. We don’t need a ‘decent privatization bill.’ We need state liquor reform, but as long as wealthy people and businesses keep threatening privatization the state isn’t going to invest any capital that will become worthless if privatization happens.

    State – increased revenue through more sales, from longer hours, better service, and more locations.
    Unions – more jobs.
    Small businesses – benefit from better service, selection, hours, liquor deliveries, internet orders, etc.
    Costco/Walmart execs – nothing.

  14. Asparagus – you’re dead wrong. California Costcos supply all quality of liquor, bottom to the top. 1.75 L of Grey Goose went for $45 a few years ago.

  16. Unfortunately, the Dems aren’t the party of small business any more than the R’s. Though the Dems could start to prove me wrong by actually taking action on this issue instead of letting Costco write legislation.

    They’ll never take action on this as long as nanny staters dominate every conversation about how to overhaul the system.

  18. @14

    Costco also must have a good selection of quality beer because they sell Sierra Nevada and Stella.

    Selling a higher-end mass marketed product ≠ a good selection
    Selling a higher-end mass marketed product ≠ selling similarly priced product from small distilleries

    The same problem exists now under the state store system, which is why it needs RFEORM.

    Right now I can go to costco and get decent wine or beer (or lots of shitty stuff), I can’t go there to get a rare, specific, or limit batch wine or beer. Compare the selection of beer at costco to say, bottleworks. Small specialty stores fill a niche for low volume, specialty sales, and they force the bigger stores to maintain a selection of higher-end products to stay competitive in selection.

  19. @ 5 – I believe I read that they’re going to auction off the state liquor store sites, allowing them to be grandfathered in but run as private businesses. So your local 6000+ sq foot store would still be there. Along with Red Apples, Metropolitan Markets, and other stores. This ain’t just about Costco – it’s about the small grocers, too.

  20. Actually, I think it would be better to have a law putting a 9000 sf *maximum* on the size of liquor stores. Then you’d limit it to privately-run liquor specialty stores and neighborhood bodegas, and exclude it from huge grocery stores and warehouse/club stores.

    As written, this is a bill I will be asking my represenatatives to vote no on. Set up a system for private distribution (alongside the existing liquor store system if some can remain competitive) that is revenue neutral or positive and I’m all for it.

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