Washington State - State Store Referendum Results

[FrEwing]

Copied from Shanken News:

Costco Wins Big In Washington Referendum

In a stunning victory for Costco and other big retailers, Washington State voters overwhelmingly approved Initiative 1183 on November 8, ending the state’s 78-year monopoly on liquor sales. Early returns showed the measure winning with some 60% of the vote. The most expensive initiative campaign in state history, the battle involved donations of $22.7 million from Costco alone, of which $18.5 million has been spent, mostly on TV advertising. Opponents, including wholesalers Southern Wine & Spirits and Young’s Market, spent some $12.5 million of their own to defeat the measure.

Now the state must sell off its Seattle-area central warehouse and inventory and auction off its 328 stores, about half of which are state-run. Contractors who operate the other stores must buy back the inventory in order to continue their business. The state’s plan to sell off its liquor distribution rights to a single wholesaler is also now forfeit. Private sales of liquor are set to begin on June 1, 2012.

With the victory, the state’s retailers also won the right to seek volume discounts from beer, wine and spirits suppliers and to warehouse their products themselves, both of which Costco had sought as early as their first lawsuit against Washington State in 2005.

[Absinthe Pete]

Good job.

[Copperstill]

What does this mean for the small Washington producer?

[Marc]

Most likely it will suck for the forseeable future. For the most part the folks here in my state have traded one monopoly (the state) for another monopoly (Costco, Safeway, et al). If one was to look at inventories currently carried by those types of stores, it does not forebode well for the craft producer. Another hit this does is it does not allow small artisan wine shops (due to the new 10K square foot requirement) to carry spirits, which would be a natural fit for craft made products.

[wadewood]

this is great win for consumers in WA sate. I lived there for 9 years and hated dealing with the state run stores.

[JohninWV]

Wade,

I get that the consumer thinks he or she is going to get out of the monopoly of state run stores.

How does the 10,000 sq/ft thing help the consumer in any way? We do a lot of sales in DC and NYC (a lot is relative, lol) and many of our best stores can't be more than 1500 sq ft. They have lots of selection and interesting products, including craft stuff...Park Avenue Liquors comes to mind.

Seems like a huge monopoly to me where a few players are going to run everyone out of business. But, I don't have all of the facts, so maybe I'm a bit out of the loop.

[bioviper]

Wade,

I get that the consumer thinks he or she is going to get out of the monopoly of state run stores.

How does the 10,000 sq/ft thing help the consumer in any way? We do a lot of sales in DC and NYC (a lot is relative, lol) and many of our best stores can't be more than 1500 sq ft. They have lots of selection and interesting products, including craft stuff...Park Avenue Liquors comes to mind.

Seems like a huge monopoly to me where a few players are going to run everyone out of business. But, I don't have all of the facts, so maybe I'm a bit out of the loop.

im getting ready to open a craft distillery in 2 months and this has messed up my whole plan. if the new guys want bulk discounts im not gonna be able to do it. i wont even be able to give them BULK. if im a small craft distillery i cant make bulk they probly wont even deal with me . so that means i will only be selling out of the tasting room.i hope i can sell enough out of the distillery to keep the lights on.at least with the state every one got a fare shake.

[bioviper]

im getting ready to open a craft distillery in 2 months and this has messed up my whole plan. if the new guys want bulk discounts im not gonna be able to do it. i wont even be able to give them BULK. if im a small craft distillery i cant make bulk they probly wont even deal with me . so that means i will only be selling out of the tasting room.i hope i can sell enough out of the distillery to keep the lights on.at least with the state every one got a fare shake.

i wonder if this means we can sell directly to bars or do we still have to go through a middle man

[delaware_phoenix]

Washington state was one of the leaders in the craft distilling industry. I'm not sure that will remain true, as Marc notes it will be very difficult (if not impossible) to get those craft products into the big box stores.

Now if you live in the sticks, far away from big box stores, does this mean your community just effectively became "spirit dry", with only beer and wine sales allowed, since there won't be any 10,000 square foot spirits stores located there?

[bioviper]

Washington state was one of the leaders in the craft distilling industry. I'm not sure that will remain true, as Marc notes it will be very difficult (if not impossible) to get those craft products into the big box stores.

Now if you live in the sticks, far away from big box stores, does this mean your community just effectively became "spirit dry", with only beer and wine sales allowed, since there won't be any 10,000 square foot spirits stores located there?

yeah pretty much!