By Jerry Cornfield Herald Writer
OLYMPIA — Easy access to booze nearly all hours every day is what many Washington lawmakers wanted to avoid when Prohibition ended in 1933.
So an alliance known as the “drys” banded together to put the state in charge of buying and selling spirits and setting the prices customers would pay.
That will end this week when the state exits the liquor business and the private sector moves in, the result of voters passing Initiative 1183 in November.
Starting Friday, bottles of vodka, bourbon, whiskey and more will populate the shelves of hundreds of supermarkets, a couple dozen Costco stores and eventually a few massive liquor-only warehouse outlets.
As a few operational wrinkles get ironed out, excitement is building in the aisles of retailers like Safeway, where one can see bottles on shelves hidden behind black curtains like forbidden fruit.
“There’s a buzz. Customers are asking about it. There’s even been attempts by some to buy it,” said Sara Osborne, public and government affairs director for Safeway.
Under the law, hard liquor cannot be sold between the hours of 2 a.m. and 6 a.m. which leaves 20 hours a day in which it can — far more than available now.
Though that means the curtains can come off when Friday arrives at the stroke of midnight, they won’t. Sales in the 170 Safeway stores won’t begin until 6 a.m., Osborne said.
Costco, whose lawyers wrote the initiative and whose dollars almost singlehandedly financed the campaign, isn’t planning anything special for Friday.
Instead, when doors open customers will find about 70 different items on display in an area near where wine is sold in its 27 stores, said Joel Benoliel, the firm’s senior vice president and chief legal officer.
“Certainly we’re not going to cover every obscure brand,” he said, noting the addition of liquor will not trigger a reduction of wine offerings. Most likely, they’ll be removing seasonal items to make way for the new products.
As the final countdown begins on this historic transition, distributors are hustling to wrap up contracts with retailers and restaurant owners and deliver them product by Friday.
“It’s not your normal week in the distribution business,” said John Guadnola, executive director of the Washington Beer and Wine Distributors Association.
To gear up, he said members of his association have hired roughly 550 people. He estimated 650,000 square feet of warehouse space are now under lease and filling up with liquor as distributors no longer get to pick up product at the state-owned distribution center in Seattle.
What privatization means for prices is unclear. Absent state control, retailers can push the bottom line up, down and all around as they see fit.
“It a big old mystery whether the customer will be paying more or less,” said Edik Saroyan of Everett, who bought a state-owned liquor store on Everett Mall Way. “We’ll just take it a step at a time and see what everybody else is doing.”
Saroyan won’t be opening June 1. He said he’s moving into a smaller site on the same street and hopes to get started selling in a few weeks. He said he’s too busy to feel excited about the change.
Smaller restaurants and retailers in rural areas may get pinched with higher prices, Guadnola predicted. Under the state-run system, a bottle of spirits cost the same to everyone regardless of location.
“That may change. You can charge somebody more if it takes longer to deliver them the product,” he said.
There is at least one big wrinkle that may need a court to iron out. It centers on how much alcohol bars and restaurants, where alcohol is sold for consuming on the premises, can buy from places like Costco, which only sells liquor for consumption off site.
The Washington State Liquor Control Board on Wednesday is expected to adopt a rule limiting purchases to no more than 24 liters of spirits — roughly three cases — in a single sale and no more than one sale of that amount per day per location.
In other words, if one buys three cases in the morning at a store, they can’t buy there again that day. However, you could travel to another store to buy three more cases.
Costco and the Washington Restaurant Association oppose the rule and insist the board is misinterpreting the language of the initiative. They say a restaurant owner should be able to make multiple purchases in a day from one place as long as no single sale exceeds 24 liters.
“We’re going to fight on that one,” Benoliel said. “If we lose before the board, we’ll go to court.”
The rule comes directly from a section of the initiative dealing with transactions between two licensed retailers, said Brian Smith, communications director for the agency.
Supporters of the rule contend that without it, retailers like Costco can effectively supplant distributors as the main supplier of alcohol to restaurants, without having to pay fees imposed on distributors by the initiative.
There’s a chance privatization won’t happen.
The state Supreme Court is considering whether the initiative is constitutional. A suit filed by opponents contends the ballot measure violates state rules requiring measures to address only one subject, because it includes a provision to set aside $10 million for public safety in addition to privatizing liquor sales.
Justices heard arguments in the case earlier this month and are expected to issue a decision before Friday.
“Theoretically, being a week away should not impact their decision at all,” said Guadnola, whose group opposed the initiative and who personally thinks it should be tossed out. “If they reverse it now, it will be very costly to distributors and to the state.”
Smith of the Liquor Control Board said the agency “would need to ramp back up immediately and we would.”
Retailers and restaurateurs don’t think it’ll be necessary.
“We believe we will be selling spirits on June 1,” Osborne said.
Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com.
