We have grown increasingly concerned by efforts to undermine, or radically dismantle, Washington's existing liquor distribution system. That three-tier system -- with clear roles for producers, distributors and retailers -- has worked well for decades in promoting public safety by keeping liquor out of the hands of minors, while allowing adults to consume alcohol responsibly.
We strongly opposed both deeply flawed initiatives (including one backed by Costco) to privatize our state's liquor system last November, and were gratified when the voters agreed with us in rejecting both proposals. But we also understood that questions and concerns about customer service and efficiency in the current liquor operations remained. That is why, after careful consideration, we joined with allies in the business community to endorse a compromise solution introduced in the Legislature this year where the state would forge a partnership with a private firm to modernize the distribution of liquor.
The liquor modernization proposal we endorsed was widely debated, as was yet another full privatization measure offered by Costco. As it moved through the Legislature, the modernization proposal we supported won strong bipartisan majorities in both the House and Senate. Meanwhile, the Costco legislation fell flat because their bill created many of the same problems that were evident in the ballot measures the public voted down last November. The modernization idea involves no risk to the state. All it does is initiate a non-binding competitive bidding process so the state can solicit bids from firms interested in running the liquor distribution system for a fixed time period. In exchange, the private partner would offer a substantial one-time up-front payment, and would share annual distribution profits with the state. And at the end of the lease the state would continue to own the liquor system, including hundreds of millions in capital investments made by the private partner.
Unfortunately, The Herald's editorial board has sided with privatization interests in attempting to delay the proposal until the latest privatization initiative -- which explicitly repeals the competitive bidding process -- is voted on in November ("Don't cloud issue for voters," June 1). We believe that is exactly the wrong approach. Full privatization is a big step, and a controversial one.
Remember, voters rejected two liquor privatization initiatives just last year. Before they vote again on the Costco privatization proposal, they deserve to have full information about the range of liquor reform options available to the state. That can only happen if the RFP process produces bids before the November election. Otherwise, voters will likely never see those bids and will never be able to judge whether the new privatization initiative makes sense. The distribution proposal is an idea that we think will benefit consumers and taxpayers, and workers as well, by improving the existing system without undermining its best aspects. A similar proposal was successfully implemented in Maine in 2004, and the original agreement is now being renewed. If we are going to change our laws about liquor, we need to move carefully to ensure that we do not create unintended consequences -- particularly since the voters just made it clear that they are concerned about the impacts of privatization.
The private partner would make substantial capital investments in the system to improve choices and service for bars, restaurants, and individual purchasers. That will not only preserve the jobs of about 1,000 hardworking liquor system employees, it will create many new jobs as well, which is an important consideration given our faltering economy.
Moreover, Washington currently ranks among the best states in the country in keeping hard alcohol out of the hands of minors. We also like the fact that under this proposal the state will retain full control over liquor regulation and enforcement and continue to operate retail liquor stores.
If the submitted distribution bids turn out to be flawed or insufficient, the state is free to reject them all. There is literally no down side to seeing what private partners have to offer. The backers of the new privatization initiative object because they fear the competition this proposal presents. Given their initiative filing, it is now even more important that the public gets a chance to see what kinds of modernization alternatives are on the table, and we encourage Gov. Gregoire to sign the bill as it was passed.
Rick Hicks is secretary-treasurer of Teamsters Local Union #174, which represents drivers who deliver spirits to state-run liquor stores.
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