By Shannon Dininny Associated Press
YAKIMA — Washington state’s voter-mandated exit from the booze business moved another step forward Friday with the conclusion of an online auction of its state-run liquor stores.
The auction marked a historic event for a state that has tightly controlled its liquor industry since the end of Prohibition, and a flurry of late bids for the 167 stores kept the auction online more than two hours past its scheduled end.
The state Liquor Control Board declined to release a total dollar value for the bids late Friday. An informal Associated Press tally showed a total of at least $27 million had been bid, but some stores were missing from that tally.
More than 13,000 bids were made.
Voters, anticipating lower prices with private industry, required the state to dismantle its liquor business when they approved Initiative 1183 last fall in what was the costliest initiative campaign in state history. Backed by membership warehouse giant Costco, the measure allows stores larger than 10,000 square feet to sell liquor, and smaller stores could only be allowed if there are no other outlets in a trade area.
The exception to that rule is Washington’s 167 state-run and 163 contract liquor stores. Contract stores, which are run by private individuals, will be allowed to continue to operate, under the initiative, while the state-run stores were the subject of the auction that opened March 8.
Successful bidders win the exclusive right to operate a liquor store at that location. In addition, the license would be exempt from approval requirements of local officials, as is usually the case.
A steady stream of late bids kept it online more than two hours longer than planned, but it finally closed at just before 6:30 p.m. Friday. The last to go: store no. 003. The Tacoma store garnered a final bid of $248,100.
The Liquor Control Board still must verify all bids and will begin notifying winners over the weekend, spokesman Brian Smith said. Winners will be announced Monday.
Pressure is on to move the process forward, because the measure takes effect June 1. More than 1,000 entities, including Target and large beverage retailer BevMo!, have already applied to begin selling liquor as a result of the initiative.
“Our customers are used to going to those locations already, and not having a break in that business activity is a benefit to the potential buyer,” Smith said.
“Those people, knowing that they are the winners, can begin the process of getting their line of credit, working with the landlord on the space, begin the licensing process, so that they can have a license and be ready to sell on June 1.”
Initiative opponents have filed suit in court, arguing that it violates state rules requiring initiatives to address only one subject, because it includes a provision for public safety funding. A judge already rejected that claim, but opponents have appealed to the state Supreme Court.
The state high court will hear arguments May 17. The entire measure would be nullified if the court determines that voters would have rejected the initiative without it.
Nearly 20 states control the retail or wholesale liquor business. Some, such as Iowa and West Virginia, have relinquished partial control in recent years, but Washington would be the first in that group to abandon the liquor business entirely.
State stores carry more than 1,400 products, including locally produced wine and spirits, and state officials have said that the auction could be a golden chance for entrepreneurs looking to serve a niche market.
The state’s spirits industry is growing, with more than 20 distillers producing gin, whiskey and vodkas distilled from Washington wheat or potatoes. Washington wineries now top 700.