Oregon won’t pursue liquor initiative this year

SALEM, Ore. — The company that bankrolled a campaign last year to privatize liquor sales in Washington state won’t do the same this year in Idaho or Oregon.

Costco Wholesale Corp. put up almost all of the $22 million in the Washington campaign to free up hard liquor sales but says it’ll be on the sidelines now.

Chains in Idaho represented by the Northwest Grocery Association had already said they wouldn’t be involved in an initiative, and their counterparts in Oregon are now saying the same thing. The organization plans to ask lawmakers in both states to open up liquor sales in 2013.

“We do believe it is coming. We believe it’s popular in Oregon,” said Shawn Miller, an Oregon lobbyist for the grocery industry trade group. A ballot initiative is still possible in future years, he said.

Washington voters decided overwhelmingly last fall to privatize liquor sales, emboldening supporters of liquor privatization who promised to bring the fight to other states that maintain a tight grip on alcohol.

Washington is currently auctioning 167 state-run liquor stores, and big-box retailers are preparing to sell liquor beginning this summer. But Costco was disappointed to find itself “essentially going it alone” in funding an initiative campaign that turned into the most expensive in Washington history, said Joel Benoliel, the chief legal officer.

The company, based in Issaquah, won’t be taking a similar role in Oregon’s or Idaho’s privatization talks, Benoliel said.

“We’re going to be cheering on the sidelines, but we’re not going to be leading the parade,” he said.

Oregon’s liquor laws, which date to Prohibition, allow the sale of packaged hard liquor only at stores run by state-licensed agents who keep a percentage of their sales. Most of the profits go to the state’s general fund, totaling about $450 million last year.

Idaho has similar controls on liquor. Attorney General Lawrence Wasden said in February that a privatization measure proposed by the Idaho Federation of Reagan Republicans might be illegal because the constitution says such decisions are the Legislature’s purview. The Northwest Grocery Association had earlier said it would skip the initiative process and go to the Legislature in 2013.

After the Washington initiative passed, the Oregon Liquor Control Commission proposed allowing grocery chains to open “store within a store” liquor operations at some locations and allowing some liquor stores to sell beer and wine. Grocery chains, which can sell beer and wine but not hard liquor, say that proposal doesn’t go far enough.

An Oregon House committee will spend the summer and fall looking at the issue and potentially crafting legislation to open the system, officials said. Lawmakers and industry officials said it was way too soon to know how far they’ll go.

“I would imagine the state’s going to continue to have a prominent role in the whole liquor issue,” said Republican Rep. Bill Kennemer of Oregon City, a co-chair of the Business and Labor Committee that will look at liquor legislation. “But I think things have changed since 1930, and it would be good to have another review about what we’re doing and if there are ways that we can function better.”

The Legislature will probably want to ensure that an expansion of liquor sales doesn’t cause social consequences like increasing drunken driving or alcoholism, Kennemer said, and there probably won’t be much appetite for changes that significantly reduce the state’s revenue from liquor sales.

“Even the people who like the system the way it is recognize that there’s probably going to be some change one way or the other,” Democratic Rep. Chris Garrett of Lake Oswego, the committee’s other co-chair. “And if the legislature doesn’t address this, we might see a ballot measure.”

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