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THE HERALD BUSINESS JOURNAL    EVERETT, WASHINGTON

SEPTEMBER 18, 2014 Search 
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Dan Bates / The Herald 
(click to enlarge)
Rick Cummins works on one of the large liquor displays at the Everett Costco near Silver Lake on June 1, on the first day of privatized sales in Washington. Cummins previously worked in liquor sales for the state and said he is happy to have been hired at Costco.
Dan Bates / The Herald 
(click to enlarge)
Mimi Saturno, of Mukilteo, looks over the selections available at the Everett Costco on June 1, on the first day of privatized liquor sales in Washington.
Sarah Weiser / The Herald 
(click to enlarge)
Shelves are stocked with liquor May 30 at TOP Food and Drug in Edmonds in preparation for the start of liquor sales.
Sarah Weiser / The Herald 
(click to enlarge)
Clint Diehm, the division manager for Young's Market Company, stocks shelves with alcohol at TOP Food and Drug in Edmonds on May 30. Employees were preparing for the first day that liquor would be sold there.
Dan Bates / The Herald 
(click to enlarge)
Rick Cummins (foreground) works on one of the large liquor displays at the Everett Costco near Silver Lake on June 1, on the first day of privatized sales in Washington. Cummins previously worked in liquor sales for the state and is happy to have been hired at Costco.

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Business calendar  
Eyes wide shut 6/2/12
Liquor switch may have unintended consequences 6/1/12
 
Jim Davis, Editor
jdavis@heraldnet.com
Published: Monday, June 4, 2012

It's a spirited start to liquor sales

Business is brisk on the first day private retailers in the state have been allowed to sell hard liquor since Prohibition

Washington erased one of the last vestiges of its blue laws June 1 when private retailers across the state began selling hard liquor for the first time since Prohibition. At stores on the first day of liquor sales, prices varied, with some lower than the previous state prices and a few comparable or higher. Customers seemed to like the convenience. "We don't have to make a special trip," said Tami Reichersaner, of Everett, as she looked over the liquor selection at Fred Meyer. Shopping for groceries and liquor at the same location saves gasoline, she said. "I'm from California, so this is about time." All the stores, and Costco in particular, carried only larger bottles -- pints and small "airplane bottles" were not in stock. Shelf prices were noticeably lower than the prices at state stores but at the check-out stand, the cost climbed as the state tax of $3.77 per liter and a 20.5 percent spirits sales tax got tacked on. Those aren't new taxes. They did get charged before at state liquor stores though most customers probably didn't think about it. Rick Cummins, a food merchandiser at Costco, started his job there recently after working for two years at a state liquor store in Lynnwood. "I'm seeing that it's (now) a hair cheaper," he said of the prices. Sales were brisk at Costco and Fred Meyer, store employees said. Before June 1, "people were wondering and asking and excited about it," said Felix Vindiola, a manager at Costco. Reichersaner noted that prices weren't much lower than before but "we figure it'll mellow out," she said. Reasons for the prices lie in the rules of Initiative 1183. The ballot measure written by Costco lawyers was designed to ensure the state and local governments do not lose any money in the transformation. It didn't touch the state's existing spirits sales tax and liter tax. It erased the state's 51.9 percent mark-up, then sought to replace those dollars by imposing fees of 10 percent on distributors and 17 percent on retailers. Of course, those distributors and retailers need to make money to stay in business. No surprise, they've added in an amount for their profit and the result is the price for most bottles of booze are going to be above what the state charged in its stores. Backers of Initiative 1183, which passed with 59 percent of the vote in November, never claimed privatizing liquor sales would mean lower prices. They think it may and preach patience to find out. "I-1183 wasn't a minor tweak to the state's liquor system but a major culture shock creating for the first time in nearly 80 years a competitive marketplace," said Jason Mercier of the business-oriented Washington Policy Center. "As with other radical changes to the status quo it will take time for the market to find its footing." Overnight, the number of places selling liquor in Washington went from roughly 350 to 1,500 with the vast majority of the increase being independently owned supermarkets, chain grocery stores and warehouse retailers like Costco. Not only are more places selling booze, they're doing it for more hours, as the new law only bans sales between 2 and 6 a.m. Erasing rules put in place in 1934 after Prohibition ended is a big change for those who produce, distribute, sell and imbibe liquor. Wine World and Spirits in Seattle set up a clock on its website to count down the final hours of the state's liquor monopoly. "It's definitely an intriguing day," said owner David LeClaire, adding with a smile, "Not like Year 2000 where people worried about satellites falling out of the sky and their cellphones not working." On the upside, his customers found 2,000 varieties of distilled spirits on sale June 1. "They are going to come in and say to themselves, 'This is all the stuff I wish the liquor stores used to carry,' " he said. There's no question that the downside, he said, "will be a little bit of a shock at the cash register." Consumers aren't the only ones dealing with the effects of fluctuating prices. Owners of hundreds of restaurants and bars around the state are negotiating for products with distributors who offer different prices and discounts as they compete for business. "It is going to be a little chaotic at first," said Diane Symms, owner of Lombardi's in Everett and Issaquah, and soon in Mill Creek. "We stocked up from the state store because we didn't know what the prices would be." What's unclear is how fees imposed by the initiative on distributors and retailers will get passed on to shoppers and to bar and restaurant owners such as herself. "It's going to be unsettling for a while," said Symms, a champion of privatization and passage of the initiative. "It is a temporary mess. Ultimately it'll all work out." As far as her customers are concerned, she said drink prices won't be rising regardless of the present uncertainty. Said Costco's Cummins, "It's all a new ball game." Bill Sheets: 425-339-3439; sheets@heraldnet.com.

Liquor prices

Below are the prices for 1.75 liters of alcohol on the first day of privatized liquor sales in Washington. Prices include sales tax and distribution fees.
LiquorState (Before June 1)CostcoFred MeyerSafeway
Smirnoff (Vodka)$29.95 $25.59 $30.21 $26.59*
Captain Morgan (Rum)$39.95 $32.59 $38.40 $40.59
Jack Daniels Black Old (Whiskey)$50.95 $39.59 $46.84 $40.59
Jose Cuervo Especial (Tequila)$39.95 $32.59 $39.73 $42.59
*Burnetts Vodka - Smirnoff was not available in 1.75 liters.