Liquor initiative bringing change to county consumers

While she waits for the outcome of two lawsuits filed to stop the implementation of Initiative 1183, which eliminates state-run liquor stores, Cathlamet Liquor Store owner Janelle Seaberg is considering what to do if the law takes effect on June 1.

“The clock is ticking,” Seaberg said. “There are a lot of questions that aren’t answered.”

Initiative 1183 closes state-run liquor stores June 1, 2012. It allows smaller contractor-run stores like Seaberg’s to obtain a liquor license and remain in business.

This week, a lawsuit filed in Cowlitz County argues that I-1183 violates the rule requiring voter initiatives to address only one subject. I-1183 changes more than the state’s role in selling liquor. It allows stores measuring at least 10,000 square feet to sell liquor, for retailers to get volume discounts on liquor and wine, and to warehouse those products themselves rather than using distributors.

Seaberg has contracted with the state to run Cathlamet’s Liquor Store since 1996 and could continue to operate a liquor store in the area if she obtains a liquor license, buys the inventory she has (which could be a $200,000 investment) and finds a distributor willing to sell the quantity she needs.

At present, the state provides inventory, and Seaberg forwards the proceeds from sales.

“There’s so much we don’t know. Like whether we can return items we can’t sell, in the (current) inventory,” she said. The inventory Seaberg received included Dry Fly Washington Wheat Whiskey, which she says is just taking up space.

“Who’s going to pay $50 for a bottle around here?” she asked.

Seaberg discussed the matter with Dan Reese, a Portland-area truck driver with Express Transport who spends three days a week delivering to small stores on the Long Beach peninsula and 700 cases to a store in Vancouver.

Seaberg assumed that customers who wanted pints or minis would be unlikely to find those at Costco. “They’ll have half-gallons and fifths,” she said.

“Costco wants to get that Kirkland label on a bottle of vodka,” Reese said, noting that he’s not worried about a job, since “everything comes to a halt without trucks.”

Costco donated about $20 million to the campaign for I-1183. Supermarket chain Safeway and Trader Joe’s Co. each contributed about $50,000 according to campaign disclosure materials.

Seaberg said local restaurants like the Riverview Restaurant and Lounge have purchased their supplies from her and plan to continue. Seaberg is considering getting a small business loan to buy the inventory she needs, or taking a partner, but for now, “I’m waiting till I hear more.”

In Wahkiakum County, 747 voters said yes to closing state-run liquor stores and 850 voted no. Statewide, the measure passed with a 59 percent yes vote.

Opponents of the measure voiced concern about increased access to alcohol for youth and others.

Wahkiakum Undersheriff Mark Howie said the majority of police chiefs and sheriffs opposed making liquor more accessible.

“Drugs and alcohol are part of 85 percent of the crimes we deal with--assaults, domestic violence, sexual assault, DUI’s. Right now, kids won’t walk into a liquor store. But in grocery stores, they can steal it, they can get older brothers and sisters to do it a lot easier,” Howie said.

The Washington State Office of Financial Management, OFM, projects that the number of outlets selling liquor will jump from 328 to 1,428, potentially bringing $480 million in revenue over six years to state and local governments.

The OFM projected retail liquor sales are estimated to grow 5 percent from increased access to liquor, and noting that the assumption is based on an academic study and growth experienced in Alberta, Canada, after state-operated liquor stores converted to private liquor stores.”

About half of the 328 liquor stores are state-run, and they will stop selling liquor by June 1. Contractors like Seaberg own the others. The liquor board will begin issuing licenses to qualified liquor distributors and retailers, and on June 1 privately owned stores will begin selling liquor in Washington.

I-1183 addressed voter concerns about a similar initiative defeated in 2010, which would have allowed minimarts and gas stations to sell liquor, and deregulated beer distribution, by requiring stores to be 10,000 square feet to obtain a liquor license, with certain exemptions in rural areas.

Stephanie Crouse, manager of Cathlamet’s grocery store, Everyday IGA, said management is considering whether they will sell liquor.

OFM’s rationale for cost projections and analysis is available at http://www.ofm.wa.gov/initiatives/2011/1183.pdf.