Having survived a final constitutional challenge before the state Supreme Court Thursday, the voter-approved initiative moving the liquor business from state to private hands finally takes effect today.
That doesn’t mean the legal wrangling over details is over, however. Those fights might just be getting started.
Demonstrating again that ballot initiatives are rarely as straightforward as they seem, differing interpretations of Initiative 1183 have surfaced, putting restaurants and retailers at odds with distributors and the state Liquor Control Board.
As bottled-booze sales begin in Washington grocery stores and other private outlets today for the first time in nearly a century, only two things appear certain: the state is out of the liquor sale and distribution business, and more lawsuits are coming.
Some discord was probably inevitable. After all, retailers wrote the initiative, and Costco spent some $22 million campaigning for it. Distributors opposed it. Yet the initiative carved out roles for both, and left the Liquor Control Board to figure out many of the specifics.
On Wednesday, it did so, issuing permanent rules. Grocers and smaller retailers — those who are taking over former state liquor stores and contract outlets — are fuming, charging that distributors were given a financial advantage never intended by the initiative’s authors. The Liquor Control Board, composed of three commissioners appointed by the governor, argues that it’s just trying to be fair to all concerned.
We think the board’s approach is too heavy on control (giving too much price-setting power to distributors) and too light on allowing market forces to dictate price, which is clearly at odds with the initiative sponsors’ intent.
One example: Restaurants previously had to purchase their booze supply in bulk from state liquor stores. Private business owners who bought those stores at auction, and owners of former state contract stores, were counting on such bulk sales to make their ventures profitable. But the Liquor Control Board decided that they’re subject to the initiative’s 17 percent license fee on gross sales, even though that fee doesn’t apply to distributors. That makes the smaller stores uncompetitive with distributors, effectively cutting them out of a crucial source of business.
The courts may have to sort out much of this. The Legislature should help next January by applying some sensible fixes that clarify what the initiative’s authors, and the voters, intended.
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