Even as the drinkers of Washington State chug Grey Goose in celebration of the voter-approved Initiative 1183—which closes all state-run liquor stores on May 31, 2012, and allows grocery stores to begin selling hard alcohol—many small-business owners are wary. Sure, the Costco-funded initiative will benefit retailers with more than 10,000 square feet of floor space (you know, retailers like Costco). But industry insiders fear that new, untested regulations for distillers, distributors, and bar owners may spill a bloodbath of red ink. And for the first few years, at least, customer selection could be reduced to the biggest brands.
On November 13, more than a dozen of these small-business owners from around the state met at a Capitol Hill bar to discuss the shifting landscape. They allowed me to attend on the condition that none of their quotes be attributed (because even as the state gets out of the business of selling liquor, they fear reprisal from the liquor board’s enforcement arm). Here’s what they’re afraid of:
Less Selection for Customers: One local wine and liquor distributor had dire predictions for what you’ll find on the shelf. “Retail stores will devote roughly 5 percent of their floor space to liquor and will only carry the top 50 brands,” he speculated. “I’ll be selling to bars, but you won’t be able to buy my cognacs or specialty whiskeys from Trader Joe’s or Safeway. There’s no way customers will have the breadth of availability that bars will have for a few years, at least.”
Bars and Restaurants Left in the Lurch: Starting June 1, you’ll be able to buy a bottle of Jim Beam at large grocery stores from 6 a.m. to 2 a.m. But it’s not clear where the stores will buy their wholesale liquor. That will be left to a yet-unseen distribution market. On March 1, liquor distributors will begin knocking on the doors of bars and grocery stores for the first time since the onset of prohibition. While major distributors will carry popular liquor—Maker’s Mark, Stoli, and other big brands—craft spirits may be left off the menu.
Bar owners also fear liquor shortages between now and March, as the state divests its liquor stock. Brian Smith, a spokesman for the Washington State Liquor Control Board (WSLCB), says the state will only be “filling special orders by the case [instead of by the bottle] through March 1.” Unfortunately, many bars can’t afford a case. Even if they could, the WSLCB is preparing to lay off up to 1,000 of its 1,400 employees. Bar owners believe that, with a sellout of stock and fewer employees around to fill orders, some liquors simply won’t be available.
Mom-and-Pop Stores Could Be Forced to Close: I-1183 includes a special provision that allows the state’s 166 contract liquor stores—which are mostly operated by families in rural areas—to stay open for business. Ideally, they could act as small specialty stores. But there’s a catch: The owners must purchase the $75,000 worth of inventory already on their shelves. “A lot of them don’t have the money to purchase their stock,” explains Smith, who adds that liquor board officials are scheduling emergency meetings with these panicked business owners. What could happen? “Those stores will just close,” he says.
Craft Distillers in Washington Get the Shaft: In 2008, a state law gave craft distilleries using at least 50 percent raw ingredients from Washington State the right to sell their products directly to customers. Since then, our craft distillery industry has blossomed to become, according to industry watchers, one of the most diverse and healthiest craft distillery scenes in the nation.
“The timing is horrible for us,” says Steven Stone, owner of Sound Spirits and president of the Washington Distillers Guild. For one thing, the state has always been their distributor. Now: “We have no idea when the LCB is going to stop ordering product,” meaning that distillers are struggling to find distributors to represent their small boutique brands. “We could be without orders for months.” In addition, the initiative recalled uniform pricing laws—which prohibited large manufacturers like Maker’s from giving bulk discounts to large retailers like Costco. “We’re not in a position to offer volume discounts like the big guys,” says Stone. “That’s going to squeeze us. When you think about it, it’s anti-entrepreneurial. It discourages specialty stores, which is what we need to survive. Worst-case scenario, you’re looking at a future where it’s hard for small distilleries to exist.” 
I do most of my shopping at Ballard Market, which I assume is well over 10,000 square feet. It currently stocks an impressive array of beer and wine – cheap, mass-produced products alongside more expensive specialties from around the world and locally produced stuff. (To a lesser extent, the same is true of every Safeway and QFC I’ve shopped at in the city.) I fail to see how the same won’t be true for liquor once stores are allowed to sell that. The market is presumably still there. With Seattle being a utopia of informed consumers, I don’t think people are going to stop buying local products just because it costs a bit more now that uniform pricing is gone.
This wasn’t the perfect initiative by any stretch of the imagination, but it was better than the nonsensical status quo. In general, I don’t have much sympathy for people who profited and benefited from a state-mandated monopoly that shouldn’t have existed in the first place.
I hope none of these business owners believe in self-fulfilling prophecies. Successful businesses make money in chaotic situations.
Sounds like those craft distillers should hire some good salesman with grocery contacts. The number of 10k groceries outnumbers state liquor stores by a factor of ten. That’s opportunity.
Why is it that nobody is mentioning the liquor superstores like those found in California? I bet it would take about 6 seconds for these to open if they are allowed to do so. These places are aisle after aisle of hooch. They have everything from Jack Daniels to elderflower liqueur and beyond. They have a way better selection (and prices) than our state-run stores. Is there something in the initiative that would prevent these places to operate in Washington?
@3 Thanks for repeating one of the the pro-1183 campaigns favorite lies- that prices will drop with the passage of 1183. The reason our booze costs more in WA is because our sales taxes are higher, and as far as I know 1183 isn’t rewriting any tax codes.
4. You miss the point. Retailers with the ability to buy quantity can as in most other states negotiate discounts which they can pass on by putting specific products or lines on sale.
What is the Strangers beef with Costco, Trader Joe’s, QFC etc. I’d rather have a competitive free market, then a government controlled market. With a free market, there is free market competition. Anybody who has taken a business 101 class at community college would understand that. BTW Wallingford QFC has one of the best Wine and Beer selections I have ever seen. I can’t wait for them to get into the liquor game! Ignorance is bliss in Strangerland. At least you all didn’t drink the Kool-aid on the propoganda that every single teenager is going to get booze and the world is going to end.
Ms. Madrid covers some points of serious concern, but doesn’t even suggest offsetting factors that may well affect the availability question.
When the state allowed wine sales in all licensed retail outlets back in 1969, it wasn’t long before there were shops dedicated entirely to wine, and the range of product locally available has expanded exponentially since. If you’ve been a patron of the WSLC stores in the past, you know that selection there is laughable compared to even modest stores in California (let alone Chicago or New York City).
I expect that liquor shops dedicated to high-end, exotic, and hard-to-find beverages will be a solid presence in the state within three years.
Within a year of the Legislature’s authorizing wine sales in all licensed retail outlets, there were dedicated wineshops springing up all over town. I predict that within the same span, we will see liquor shops dedicated to high-end, exotic, and hard-to-find alcoholic beverages. Even at worst, the selection won’t be more narrow that the state stores offer today.
Kirkland brand vodka- the mark of extinction
If you wanna drink, you gotta pay. Get out your wallets all you drunkards.
Local cocktail resurgence allows one discover that: ingredients matter, a LOT.
A cocktail made w/marginal vs. good spirits or modifiers can be dramatically different.
While some substitutes exist, some unique items are have no substitute, and are often hard to find, ergo: expensive or you go without.
Otherwise, a ‘drink’ may just be a spirit in a glass vs. in the bottle, and a ‘mixed drink’ may be as elegant as off-brand cola. Good if that works for you.
If you are of the opinion that, ‘after one they all taste the same’, be aware that isn’t true for all (some of us only want one, I’m driving). If you agree, then once you pay for tax-transport-profit, extra money for national corporate profits are OK too, right?
Some pundits claim that business is hoarding money against uncertainty in our laws. For those brave souls whose financial lives were bet on stable state liquor laws…your state and electorate has just allowed mega-biz/mega-bux to buy a law of their own crafting and you got fucked, hard and heartlessly.
They can buy another, and mount a powerful campaign against any attempt at correction.
Any law conceived in such a manner should never reach a ballot.
But, this seems to be the minority opinion….
Drink and drive, just do it responsibly.
And as a final note, do NOT go on thewhiskeyexchange.com or any other out of state or internet retailer of spirits that will deliver to your door without anyone else in the state knowing about it. That is bad. Don’t even think it.
What dose the government of washington state do well? sell booze and “not” bust drunk drivers?
as America is going through rehabilitation pains as its too ignorant to stay off the rail road tracks of piss head republicans I don’t have any patience for slow poke like a slow joke constipated crap until it hurts just to shit policies.
They yack of crap “they” cant do that every other state in the nation has done for decades and when the Feds slap the taste of whiskey out of their mouths they roll around like a elephant seal hiding behind tax paid lawyers and as usual the first and last person to get hurt is joe public?
Washington State has a very extremely idiotic legal problem that favors the democrat versions of George W Bush that laugh and fart all over Olympia.
I drink a-lone……..YEAHHHHHH, with nobody else…….
What horseshit.
Okay, Stranger, I get it. You’re pissed that I-1183 passed. You’re grieving. Wah-wah-wah!!
If Trader Joe, Safeway, et. al. won’t carry what people want, then one or more large, liquor-only chains will enter the market. An example from another free-market state: Binny’s, of Chicago. If there’s a demand for it, we’ll be able to buy it.
As for the Washington State distillers, if they needed a Soviet-style monopoly to survive, then their products can’t have been very good. I will shed no tears.
As a frequent visitor to Seattle from “wild and crazy” Nevada, this business of State-run liquor stores drove me crazy. Stupidity at it’s finest.
Glad the initiative passed.
It’s impossible to feel sympathy for the people who have been benefiting for so long from the crappy status quo, which was pretty much hand-crafted by the distributors for their own benefit. That’s why they hate to see it go.
If they’re really worried, then it’s basis for some optimism.
@4 Prices should go down some — the state currently marks up everything 51%, before the liquor taxes are added. The liquor taxes themselves do not change but the 51% markup goes away, and is replaced by a 27% combined fee paid by distributors and retailers, which drops to 22% in two years.
By the way, I was just as Costco today, and they are soliciting suggestions from customers about which booze to carry. I don’t think it’s just going to be half-gallon jugs of Maker’s Mark.
wine world on 45th is going to carry hard licker, and theyre going to have a big selection!
not sure why stranger hates this issue so much. the overall selection of booze cant get any worse than the crappy store near my house on 23rd. which closes at 7 pm for chrissakes.
yay for more booze!
@18, you’ve either conveniently forgotten or are ignoring the fact that both distributors and retailers will be marking their products up. You know, to make a profit.
#21, you’ve conveniently forgotten that Costco marks up a lot of stuff by only, and that it will be able to bypass the distributors. Prices will fall.
#21, you’ve conveniently forgotten that Costco marks up a lot of stuff by only 7%, and that it will be able to bypass the distributors. Prices will fall.
Yay, prices will fall, if you wanna buy a Costco membership and drive to SoDo every time you wanna buy liquor. Right now I can walk to multiple liquor stores that have a huge selection and are open til 9pm (to the people that argue the state run stores have crappy hours: you really can’t get around to buying booze before 9pm?) No way Costco or Safeway will come even close on selection. Don’t believe me? Check the liquor aisle at a grocery store in California. And sure it’d be great if a BevMo or some other huge liquor store would open, but again, they’re gonna be in SoDo or Southcenter or some other cheap place where big warehouse stores open. Can’t wait..