Yesterday, Costco and the rest of the initiative-1183 gang filed a lawsuit against the Washington State Liquor Control Board. The board interpreted one clause in the voter-approved initiative (which privatized liquor sales) in a way that will make it impossible for Costco to act as a liquor distributor to bars and restaurants—which is what Costco wanted all along.
But, as I posted yesterday, this lawsuit against the state is really a proxy battlefield in the ongoing war between Costco and the current liquor-distribution duopoly enjoyed by Southern Wine & Spirits and Young's Market Company.
(More background on this byzantine greed-parade here and here.)
At the end of the day yesterday, the WSLCB released a statement, accusing the Costco crowd of framing the issue in a way that is "one-sided and inaccurate."
The Board is confident in the rules drafted to implement I-1183. The Board’s rulemaking was based on its own interpretation, with advice and counsel of its assigned Sr. Assistant Attorney General. It was fully vetted as the soundest legal interpretation.
The plaintiffs allege in the lawsuit itself that the Board made the rules this way because it didn’t like Initiative 1183 or that the Board’s rules make the cost of liquor so high. This is not true.
The full press release is below the jump. But the paragraphs above are its basic message. The clash of the middlemen continues. (Any former initiative supporters out there feeling voters' remorse?)
In other booze news: If you're curious to see how Washington's current liquor taxes stack up against other states—they're the highest in the nation and something around 10 times the national average—see this chart at the Tax Foundation.
As Steven Stone, the president of the distiller's guild, said yesterday: "Washington doesn't have an income tax, so we have to tax something. But spirits are being unfairly targeted."
The Liquor Control Board (Board) is reviewing the lawsuit filed against it by the plaintiffs: Costco, NW Grocery Associations and the Washington Restaurant Association. The plaintiffs were key authors and the primary financial supporters of Initiative 1183.
The plaintiffs’ media message is one-sided and inaccurate.
The Board is confident in the rules drafted to implement I-1183. The Board’s rulemaking was based on its own interpretation, with advice and counsel of its assigned Sr. Assistant Attorney General. It was fully vetted as the soundest legal interpretation.
The plaintiffs allege in the lawsuit itself that the Board made the rules this way because it didn’t like Initiative 1183 or that the Board’s rules make the cost of liquor so high. This is not true.
As a public agency, the Board was neutral throughout the campaign and implementation, and successfully defended the initiative in the Supreme Court against a constitutional challenge. The truth is that the price of liquor is higher because of 10 percent fees at distribution and 17 percent at retail that the plaintiffs themselves drafted and voters approved in 2011. The taxes are the exact same spirits and liter taxes customers have paid for many years. A Frequently Asked Questions (FAQ) fact sheet on liquor prices is available on the Board website.
The Board rule-making process was open, transparent and extended over several months. The Board and staff took extraordinary steps in order to be inclusive of all impacted parties, including the plaintiffs.
Unfortunately, there are many different financial relationships that are impacted by I-1183. What benefits one entity is likely to negatively impact others.
More information about Initiative 1183 as well as an audio clip of the February 22, 2012 public hearing is available on the LCB website at www.liq.wa.gov.
