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Liquor initiatives are the latest salvos in a long debate

  • A case of Baileys Irish Cream travels on a conveyor at the Washington State Liquor Control Board Distribution Center in Seattle in September.

    Mark Mulligan / The Herald

    A case of Baileys Irish Cream travels on a conveyor at the Washington State Liquor Control Board Distribution Center in Seattle in September.

  • Cases of liquor come down the conveyer at the Washington State Liquor Control Board Distribution Center in South Seattle.

    Mark Mulligan / The Herald

    Cases of liquor come down the conveyer at the Washington State Liquor Control Board Distribution Center in South Seattle.

  • Mead Fenton loads cases of alcohol onto a truck for distribution in September at the Washington State Liquor Control Board Distribution Center in Seat...

    Mark Mulligan / The Herald

    Mead Fenton loads cases of alcohol onto a truck for distribution in September at the Washington State Liquor Control Board Distribution Center in Seattle.

  • Expediters load cases of alcohol onto a truck for distribution at the Washington State Liquor Control Board Distribution Center in South Seattle.

    Mark Mulligan / The Herald

    Expediters load cases of alcohol onto a truck for distribution at the Washington State Liquor Control Board Distribution Center in South Seattle.

  • Pallets of liquor fill one of the surplus storage isles of the Washington State Liquor Control Board Distribution Center in South Seattle.

    Mark Mulligan / The Herald

    Pallets of liquor fill one of the surplus storage isles of the Washington State Liquor Control Board Distribution Center in South Seattle.

  • Looking down at a portion of the Washington State Liquor Control Board Distribution Center in South Seattle, one can see carousels that help sort indi...

    Mark Mulligan / The Herald

    Looking down at a portion of the Washington State Liquor Control Board Distribution Center in South Seattle, one can see carousels that help sort individual cases of liquor (left), large isles that serve as surplus storage (blue and orange shelves to the left middle), and cases that have been brought into the receiving area (right).

  • Mead Fenton loads cases of alcohol onto a truck for distribution at the Washington State Liquor Control Board Distribution Center in South Seattle.

    Mark Mulligan / The Herald

    Mead Fenton loads cases of alcohol onto a truck for distribution at the Washington State Liquor Control Board Distribution Center in South Seattle.

  • Individual cases of liquor can be sorted through a carousel using an elevator system at the Washington State Liquor Board Distribution Center in Seatt...

    Mark Mulligan / The Herald

    Individual cases of liquor can be sorted through a carousel using an elevator system at the Washington State Liquor Board Distribution Center in Seattle.

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By Jerry Cornfield
Herald Writer
Published:
  • A case of Baileys Irish Cream travels on a conveyor at the Washington State Liquor Control Board Distribution Center in Seattle in September.

    Mark Mulligan / The Herald

    A case of Baileys Irish Cream travels on a conveyor at the Washington State Liquor Control Board Distribution Center in Seattle in September.

  • Cases of liquor come down the conveyer at the Washington State Liquor Control Board Distribution Center in South Seattle.

    Mark Mulligan / The Herald

    Cases of liquor come down the conveyer at the Washington State Liquor Control Board Distribution Center in South Seattle.

  • Mead Fenton loads cases of alcohol onto a truck for distribution in September at the Washington State Liquor Control Board Distribution Center in Seat...

    Mark Mulligan / The Herald

    Mead Fenton loads cases of alcohol onto a truck for distribution in September at the Washington State Liquor Control Board Distribution Center in Seattle.

  • Expediters load cases of alcohol onto a truck for distribution at the Washington State Liquor Control Board Distribution Center in South Seattle.

    Mark Mulligan / The Herald

    Expediters load cases of alcohol onto a truck for distribution at the Washington State Liquor Control Board Distribution Center in South Seattle.

  • Pallets of liquor fill one of the surplus storage isles of the Washington State Liquor Control Board Distribution Center in South Seattle.

    Mark Mulligan / The Herald

    Pallets of liquor fill one of the surplus storage isles of the Washington State Liquor Control Board Distribution Center in South Seattle.

  • Looking down at a portion of the Washington State Liquor Control Board Distribution Center in South Seattle, one can see carousels that help sort indi...

    Mark Mulligan / The Herald

    Looking down at a portion of the Washington State Liquor Control Board Distribution Center in South Seattle, one can see carousels that help sort individual cases of liquor (left), large isles that serve as surplus storage (blue and orange shelves to the left middle), and cases that have been brought into the receiving area (right).

  • Mead Fenton loads cases of alcohol onto a truck for distribution at the Washington State Liquor Control Board Distribution Center in South Seattle.

    Mark Mulligan / The Herald

    Mead Fenton loads cases of alcohol onto a truck for distribution at the Washington State Liquor Control Board Distribution Center in South Seattle.

  • Individual cases of liquor can be sorted through a carousel using an elevator system at the Washington State Liquor Board Distribution Center in Seatt...

    Mark Mulligan / The Herald

    Individual cases of liquor can be sorted through a carousel using an elevator system at the Washington State Liquor Board Distribution Center in Seattle.

On a south Seattle thoroughfare lined with industrial buildings sits a warehouse, a half dozen stories tall and 220,000 square feet in size, through which passes nearly every bottle of distilled spirits legally sold in Washington.
Inside are pallets piled high with boxes of brand-name whiskey, vodka, gin, rum and not-so-well-known varieties of liquor.
Five days a week, 24 hours a day, cases of booze rumble along tracks of a conveyor system that ends with state employees steering them into trucks for delivery to state-regulated stores in every corner of Washington.
An estimated 22,000 cases are shipped out each day, providing inventory for the 315 locations where residents, restaurateurs and bar owners all go to stock up on hard liquor.
A big change may be coming.
Voters face two choices on the ballot — initiatives 1100 and 1105 — to break the state's ironclad grip on the sale and distribution of liquor and place it in the hands of the private sector.
Though crafted differently, both aim to deliver essentially the same result to consumers: more places selling a larger assortment for longer hours each day. As competition increases, prices may even drop, supporters say.
“In general, everything should improve for the consumer,” said Charla Neuman, spokeswoman for the coalition pushing I-1105. “Whether you drink liquor or not, this is good for the taxpayers, too, because selling liquor is the last thing the state should be worrying about right now.”
But opponents of the most serious attempt at privatization in years have a warning for voters: Their communities will pay a high cost for such convenience as they deal with the fallout of more people, including, they say, more teens, drinking more hours each day.
“I'm concerned about a guy walking out of a tavern at 1:30 a.m., probably intoxicated, walking across the street to a mini-mart and picking up a fifth, then driving,” said Snohomish County Sheriff John Lovick, one of the first elected law enforcement officials to sign on with the opposition campaign. “I don't think we're ready for all that.”

* * *

How convenient could it be to buy a pint or fifth if the rules change?
Very.
At the least, initiative sponsors say, one should be able to get their favorite bourbon wherever six-packs of beer or bottles of wine are now sold.
There were 5,041 places at the start of September, according to state figures. That covers supermarkets to mini-marts, big box retailers to chain drug stores — places licensed to sell beer and wine out the door.
For example, Everett, which now has five state liquor stores, could wind up with 142 places selling hard liquor, according to the Association of Washington Cities. Residents of Lake Stevens, who have one liquor store today, might end up with 21 locations.
Under the initiatives, holders of the off-premise licenses would, with few exceptions, be able to transition quickly into selling hard liquor. For most, filing paperwork and paying a fee would be enough. Major retailers could be hawking the hard stuff by the middle of next year if all went smoothly.
Backers of the measures don't think every eligible licensee will do so. That's not stopping the cities' association from drawing a dramatic picture of the potential change.
City by city, the association tallied beer and wine licensees as well as state and contract liquor stores and put them in a chart.
Looking at the list, there could be 30 sites in Edmonds, 68 in Lynnwood and 30 in Snohomish.

* * *

Easy access to booze all hours of every day is exactly what many Washington lawmakers wanted to avoid when Prohibition ended in 1933.
At the time, an alliance of lawmakers referred to as the “drys” pushed to impose the state's will on the distribution, sale and imbibing of alcohol in public places. They overwhelmed those wanting a hands-off approach when, in 1934, the Legislature met in special session to pass a law pouring the foundation of today's system.
Sponsored by Earl Newell Steele, a state senator from Olympia best known as a pioneer in the oyster industry, the 49-page law put the state in charge of deciding when and where liquor would be sold and by whom.
It set up liquor stores owned, operated and staffed by the state and government employees. They select the inventory to be sold to everyone else, a job which today involves tasting new brands to determine if they might be good sellers.
The state also created the Washington State Liquor Control Board to license, regulate and enforce laws as well as issue licenses and prevent sales of beer, wine and hard liquor to minors.
Washington is one of 18 control states and one of 13 involved in retail sales of liquor. While past attempts to privatize failed, forces opposed to the monopoly have chipped away at the law the past 70 years.
Dan Evans recalled fierce and passionate debates almost annually when he served as a lawmaker, then governor.
In the late 1950s, he said, the Legislature found itself split on letting state stores display bottles of liquor on counters and shelves. At that time, they had to be kept out of sight in a back room. Customers wrote their orders on paper for clerks, who then went back to fill the requests.
Another tussle centered on lifting the law's ban on sales of alcohol on Sundays, which forced bars and taverns to stop serving at midnight Saturday. Lawmakers deadlocked on the issue several times. When a law to change the rules reached his desk in 1967, he signed it.
Forty years would pass before state lawmakers agreed to open a handful of the state-owned and contract liquor stores on Sundays.
Evans, who now sits on the board of directors of Costco, which is pushing Initiative 1100, thinks this year may bring a revolution of the state's liquor laws.
“Over time, we've changed. The whole attitude of people has changed,” he said. “I think we can handle it. Thirty-two other states have and they've gotten along really well.”

* * *

Both initiatives direct the state to close its Seattle distribution center, shut down its 161-state-owned stores and end ties with the 154 privately run contract liquor outlets.
It will lead to layoffs of roughly 875 state employees. These include assistant managers in the stores who make $14.77 an hour and store managers with annual salaries of $34,800 to $39,036. About 90 positions are in the distribution center, where annual salaries range from $27,000 to $39,036.
For those laboring amid the constant hum of machinery at the center, this prospect is the proverbial elephant in the room.
Mead Fenton of Des Moines, an expediter whose job is getting boxes of booze in the proper trucks, said he thinks about the situation “every day” and knows colleagues are looking for other work.
He's not publicly taking sides. “You can spin (the issue) any way you want to,” he said.
Pat Whalen of Puyallup said this year's ballot battle is the most serious effort at privatizing he's seen in 35 years on the job.
On a break, he said he hoped voters grasp that the touted convenience and lower prices will cost people their jobs. He said it'll also boost profits most for mega-retailers pushing for the change.
“I don't think most of the older people in Washington are eager to privatize the liquor stores,” he said. “It's just Costco and Wal-Mart that are greedy and trying to fool people into thinking it'll be cheaper, and it won't be.”

* * *

Diana Symms, owner of Lombardi's restaurant near Everett's marina, said she hopes she can charge customers less for a well drink if voters kick the state out of the business of selling hard liquor.
“I don't know what's going to happen for certain. I think it will cost me less to buy liquor with privatization,” she said. “I do think prices will be lower due to the overall competition. It will be a benefit for everyone.”
Initiative proponents are careful not to promise lower prices — for drinks, bottles or fifths. They figure it will happen when competition is unleashed.
“We're not saying for sure that they'll see lower prices. If you open up the market, why won't prices go down?” said Ashley Bach, spokesman for the Yes to 1100 campaign.
Today, the pricing structure set by the state ensures the same price is charged for the same product in every store.
That cost covers what the state pays for the product plus a mark-up of 51.9 percent — essentially its profit. There also are state and federal taxes added in. Today, when someone pays $14.95 for bottle, $3.79 goes to the maker of the product, $7.02 is for taxes and $4.14 is the mark-up, according to the state liquor control board.
Initiative 1100 wipes out the state's power to control prices while letting retailers make deals directly with wholesalers. It axes the mark-up but leaves the taxes. Initiative 1105 keeps some control into the pricing rules but allows for discounts on large volume purchases. On taxes, it tells the Legislature to figure out a system before any licenses to sell hard liquor are issued.
Disposing of the mark-up is one reason why supporters feel consumers will pay less for their booze.
Opponents contend the initiatives free retailers and distributors to mark up their charge to the point where there may be no tangible difference from the situation today.
“I don't think prices will be lower for consumers. Maybe at Costco,” said John Guadnola, executive director of the Washington Beer and Wine Wholesalers Association. “(Drinks) certainly won't be cheaper. I think they'll be more expensive.”

* * *

Opponents believe the public will be less safe with hard liquor so readily available in communities. Added convenience will increase alcohol-fueled troubles including accidents, alcoholism and violence, they argue.
There's another concern: The loss of the mark-up will hurt cities and counties because they now get a portion of those dollars. Snohomish County, for example, received $1.66 million and Everett got $1.3 million in the fiscal year that ended June 30.
“It's a double whammy. You dramatically increase the enforcement problems and you take away the money that local governments now use for enforcement,” Guadnola said. “There's no significant benefit to the public to offset the significant downsides.”
Proponents say that once the market opens, more alcohol might be sold and the taxes would make up some of those predicted revenue losses from the state's mark-up.
Finally, foes contend hard liquor will wind up in the hands of teenagers more often because, they claim, private store clerks are less vigilant in ensuring the age of buyers.
The Liquor Control Board reports that minors illegally buy hard liquor 6 percent of the time at state stores. By comparison, the agency found that teens succeeded in illicitly purchasing beer or wine 25 percent of the time. There are more private stores selling beer than the number of state stores.
“Our employees don't have any incentive to sell to a minor,” explained agency spokesman Brian Smith. “We're doing an effective job of keeping alcohol out of the hands of juveniles.”
Bach almost scoffed at the argument that lifting state controls will bring havoc into communities and put booze in the hands of thousands of teenagers. With privatization, the state agency can better focus on public safety and preventing illicit purchases by teens.
“They're trying to prey on fear,” he said of the arguments. “They don't have any real numbers to back it up. They are basically saying ‘I know it in my gut.' ”
Evans can hear strains of past debates in this year's fight.
“Will (privatization) suddenly create new drunks where there weren't any before or change a person's drinking habits so radically we have a whole lot more people driving drunk? I don't think so,” he said. “The parade of horribles, that's what elections are all about, and voters get to decide.”
Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com.

The initiatives
Initiative 1100: This measure would close state liquor stores by Dec. 31, 2011, terminate contracts with private liquor stores, and shut down the state's distribution operation. It ends the state's power to sell liquor and lets private parties import, distribute and sell booze. Existing state taxes on spirits remain; the state's mark-up is eliminated.
The Liquor Control Board's powers would be limited to licensing, taxation, enforcement and education. The measure eliminates rules requiring licensed manufacturers of beer and wine to sell only to licensed distributors who sell only to licensed retailers.
Initiative 1105: This measure would close state liquor stores and terminate ties with contract liquor stores by April 1, 2012. It aims to shut down the distribution center and sell the inventory by the same date. It ends the state's power to sell liquor and lets private parties import, distribute and sell booze.
Existing state taxes on spirits are eliminated, as well as the state's mark-up. New means of raising revenue for cities, counties and the state are created. Retailers and distributors will pay a percentage of their gross sales, and the Liquor Control Board must come up with a new tax on sales of spirits. The measure seeks to generate at least $100 million in additional aid to governments for five years beginning Nov. 1, 2011.
This measure would require licensed retailers of spirits to purchase products only from duly-licensed spirits distributors, with certain exceptions.
Source: State Voter's Pamphlet, Secretary of State

More stores
Initiatives 1100 and 1105 would allow sales of hard liquor at thousands of places now licensed to sell beer and wine. The Association of Washington Cities has tried to calculate how many could wind up in each incorporated city in the state.*
Below is the number of current state or contract liquor stores in Snohomish and Island County cities, along with the number of places that could be eligible to sell liquor under the initiatives.
Arlington
Current: 2
Eligible: 26
Bothell
Current: 2
Eligible: 42
Brier
Current: 0
Eligible: 1
Darrington
Current: 1
Eligible: 3
Edmonds
Current: 1
Eligible: 30
Everett
Current: 5
Eligible: 142
Gold Bar
Current: 0
Eligible: 3
Granite Falls
Current: 1
Eligible: 8
Index
Current: 0
Eligible: 1
Lake Stevens
Current: 1
Eligible: 21
Lynnwood
Current: 2
Eligible: 68
Marysville
Current: 1
Eligible: 48
Mill Creek
Current: 1
Eligible: 14
Monroe
Current: 1
Eligible: 21
M. Terrace
Current: 1
Eligible: 17
Mukilteo
Current: 2
Eligible: 15
Snohomish
Current: 2
Eligible: 30
Stanwood
Current: 1
Eligible: 14
Sultan
Current: 1
Eligible: 9
Woodway
Current: 0
Eligible: 0
Coupeville
Current: 1
Eligible: 5
Langley
Current: 1
Eligible: 6
Oak Harbor
Current: 1
Eligible: 23
*These numbers exclude places licensed for drinking of alcohol on premises such as bars and restaurants. The AWC developed these projected numbers from ZIP codes of licensed locations as of July and does not account for sites in unincorporated areas. For instance, Clinton and Freeland both have one liquor store currently, but are not included in the AWC projections. The Bothell figure is for the entire city.

Who pays for ads?
Battle lines are clearly drawn on liquor privatization. Below is a snapshot of the big financiers in the debate. For all the details, go to www.pdc.wa.gov.
Yes to 1100
www.yesto1100.com/
Raised: $3,073,297
Spent: $1,706,682
Top contributors: Costco, $2,234,433; Safeway Inc., $634,410
Yes on 1105
http://liquorreform.org/
Raised: $2,244,000
Spent: $2,242,022
Top contributors: Young's Market Co., $1,219,500; Odom Southern Holdings, $1,004,500
No on 1100/1105
www.protectourcommunities.com/
Raised: $7,138,395
Spent: $3,439,879
Top contributors: National Beer Wholesalers Assoc., $2 million; Beer Institute, $2 million; Washington Beer and Wine Wholesalers Association, $1.75 million.







Story tags » State electionsAddiction

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