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Arlington Spirits fills state’s liquor sales void

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By John Wolcott
HBJ Freelance Writer
Published: Tuesday, September 18, 2012, 12:01 a.m.
  • Scott Cho, owner of the new Arlington Spirits liquor store in Arlington, competes with grocery stores and other outlets by offering a wider range of l...

    John Wolcott / For HBJ

    Scott Cho, owner of the new Arlington Spirits liquor store in Arlington, competes with grocery stores and other outlets by offering a wider range of liquor and wine brands compared to his competitors.

ARLINGTON — After 78 years of state-controlled liquor sales ended June 1, private businesses like Arlington Spirits opened up to offer hundreds of brands of liquors and wines, competing in the marketplace by carrying a much broader array of products than supermarkets, Costco and other new liquor retailers.
When voter approval of Initiative 1183 that privatized Washington’s liquor sales forced the Washington State Liquor Control Board closed its 167 liquor stores, more than 1,500 retailers were authorized to sell liquor.
One of those was Scott Cho’s Arlington Spirits, housed in the same building used by the former state-run liquor store at 390 N. West St. in downtown Arlington.
“We have more than 1,500 different items in stock,” said Cho, a Mukilteo resident who bought the former state-run liquor store. “People love a variety of brands and flavors, and we can stock many more in our store than you’ll find in businesses where spirits are only a part of their merchandise.”
Although the state is out of the liquor sales business, many customers have been confused about state taxes on bottled spirits.
“Combined, state taxes are more than half the cost of the products sold in private stores,” Cho said. “We only make a small margin on each sale but we offer more variety and that brings people in.”
According to the Liquor Control Board’s website, there is a 20.5 percent retail sales tax and a $3.77 liter tax, prorated to the size of each bottle. Plus, I-1183 requires distributors to pay the state $150 million by March 31, 2013, which leads to markups by distributors to help cover the extra costs imposed by the initiative.
When I-1183 transferred liquor sales from state outlets to private stores, it also brought new fees, such as a 10 percent tax for distributors and a 17 percent fee for retailers.
“Altogether, state taxes on liquor sales are more than 55 percent of the sales price,” Cho said, “but we’ve included the additional taxes on our store shelf labels so the total price people see is what they’ll pay at the checkout, with no surprises.”
The Washington State Office of Financial Management estimated that the combined effect of adding markups and new fees would total between 52 and 72 percent, compared to the previous state-controlled markups and fees of 51.9 percent.
One of Cho’s goals is to expand the variety of wines the store carries. Even now, there are more than 100 different brands, including Washington wines, some from local wineries that haven’t tried retailing before.
For those looking for flavored vodkas such as Smirnoff, Pinnacle and Burnett’s, Cho’s store carries many more varieties than most of the larger grocery stores because his store focuses only on liquor and wine products.
For more information, visit Arlington Spirits at 390 N. West St. or call 360-435-3942.
Story tags » SCBJ NewsSCBJ Business

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