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Snooth User: jamessulis

New laws in Washington State

Posted by jamessulis, Apr 7, 2012.

Announcing the latest legislative happenings in the State of Washington. Effective on June 1st, 2012 the state of Washington will switch from State controlled liquor stores to a free based system where by supermarkets and independant liquor stores will now be able to sell hard liquor. The old system was started in prohibition days in the 30's. The big push was initiated by Costco who spent 22 million of their own to promote and help pass the new laws. I am excited from the standpoint that there will be whiskey and such on the shelves at supermarkets and having competition amongst retailers to lower the pricing. We citizens pay almost double now under the current system for the hard stuff compared to other States. Also hoping our new retailers will start stocking some additional new wines on their shelves from different regions.

Lefty - The Great Pacific Northwest

Replies

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Reply by gregt, Apr 7, 2012.

As I'm sure you know, one of the arguments against the law was that there will be a reduction in choice because the supermarkets don't want to deal with hundreds of small producers.  So they concentrate on the big ones and you'll see all the Gallo brands - Pepperwood, Dancing Bull, Don Miguel Gascon, Barefoot, Turning Leaf, William Hill, Rancho Zabaco, MacMurray, and probably 2 dozen others.  You'll also see the large negociant-type producers - Layer Cake, DuBouef, etc., and the former Foster's brands - Rosemount, Beringer, Yarra, Wolf Blass, etc., and you'll see the big US producers like BV from CA and Chateau St Michelle from WA and their brands - Columbia Crest, Ch St Michelle, Northstar, etc. 

In other words, you'll see all the same national brands you see in every supermarket or large market and you won't see the little artisinal producers because the supermarkets can't deal with them.

I think that's partly BS. No doubt you'll see those same large producers.

But you already saw them in the state stores.  And you may also find some competition, although don't count on that.

OTOH, what you will also find is that small stores start popping up and they're willing to, and in fact have to, find more interesting out-of-the-way wines.  So Washington is MUCH better off now.  Congrats!

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Reply by JonDerry, Apr 7, 2012.

To hell with grocery store wine!

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Reply by duncan 906, Apr 7, 2012.

In the UK there is a very good mark up on wine so every supermarket,corner shop and garage is selling it..A lot of it consists of the major brands Callo and Blossom Hill from the US,and Hardys and Wolf from Australia etc, and a lot consists of own brands but we do get wine from single producers as well.There are also specialist wine shops,internet/mail order suppliers and a site that works like ebay  www.bidforwine.co.uk

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Reply by zufrieden, Apr 7, 2012.

The comments are as expected.  Washington is my neighbouring state and I am quite familiar with the state controlled liquor store system there.  I think James was referring more to some possible improvement in the distribution and selection of more spiritous beverages than wine or beer - such as fine single malt Scotch from boutique producers in the back of beyond of Scotland.  But whether Scotch was on his mind or no, experience in Canada (particular the Province of Alberta) has shown that complete privatisation of liquor sales (and distribution) does not usually improve selection or even have much impact on price.  In some cases, access to liquor actually become constrained in smaller, more isolated communities. On the other hand, privatisation  does lower state revenues to and makes control of distribution more problematic.  

I leave it to each of you to decide whether control of an addictive substance is worthwhile or not, but it might be argued that the social disbenefits of alcohol consumption are easier to manage with some degree of state intervention.  The revenues could be used to offset the health issues that tend to follow in the wake of increased access to controlled substances such as alcohol and tobacco.

At home here in British Columbia, we still adhere to the government liquor store as the main distribution model - although we have private wine shops and beer off-sales (no hard liquor, though).  I believe that, notwithstaning the pros and cons of state control of alcohol distribution, the move toward more private distribution is invevitable.  People demand choice and loud voices win out in the end.

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Reply by jamessulis, Apr 7, 2012.

Thanks for all the educated information posted. I rely on Snooth as my information center when it comes to Wine and Spirits.

Prior to moving to the State of Washington in 2008, my home was just outside Chicago where I was born. We had a Show Horse Farm and had trainers flown in from Oregon and Washington. Every trip they made they always stuffed a few bottles of hard liquor in their return luggage as they couldn't believe how inexpensive it was by comparison. For example: Canadian Club (the large one, is it 1.75 litre?) was always $19.95 and in 2010 on a return for vacation, it still was $19.95. Here in Washington the same product is $32.-- to $34 dollars. This is all due to different states taxes on alcohol and I am guessing as I don't know the reason. I am hoping free enterprize will reduce the price and offer greater selections, I will have to rely on the future to tell me. I am an Optimist. 

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Reply by gregt, Apr 8, 2012.

Zuf - I for one am willing to be convinced. If some degree of state intervention helps manage the social disbenefits of alcohol, we should see fewer alcohol related issues in states where that is the rule - fewer alcoholics, fewer accidents, fewer crimes, fewer problems all around. If we don't see these declines, what is the trade off? Moreover, if the state is going to be a participant in the market rather than an umpire, wouldn't the same benefits be found in the market for clothing, food, housing, cars and transportation, gardening implements and flowers, computers, and pretty much anything?

Taxes of course are another story. James - they're going to get you some way. If it's not excise taxes, it's sales or income or property or something.

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Reply by duncan 906, Apr 8, 2012.

Here in Britain we do have a problem with'the social disbenefits of alchol'One very obvious problem is the number of young people who indulge in 'binge drinking' in our town centres on weekend evenings.The police have to deal with those who become drunk and disorderly or get into fights or have accidents and the NHS casualty departments are inundated.There are also older and better behaved people who consistently drink too much to the detriment of their long term health and again this places stress on the NHS.The government has responded to these issues with a public information campaign to educate the public as to the dangers of alchol overcopnsumption.A man should not consume more than two bottles of wine or equivalent per week and a woman one.The drinks industry however is a well-funded and powerful lobby who spend a lot of money wining and dining members of parliament and local councilloprs and HM Treasury gets a lot of tax revenue from all the alchol sold so it is unlikely that Britain will ever go for state control of alchol sales.David Cameron is known to favour taxing drink by the number of units of alchol but the Opposition Labour party [who see the world in terms of class war ] feel that this means that only the rich would be able to afford to drink.Another point is that if the government increases the price of alchol then all the ferry operators and all the shopkeepers in Calais are going to be rubbing their hands with glee because under EU rules [which the British government cannot change] a person can bring back as much alchol as he likes as long as it is for his own use as opposed to resale

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Reply by gregt, Apr 8, 2012.

"The drinks industry however is a well-funded and powerful lobby who spend a lot of money"

Yep.  World wide.

It would seem tho, that the wine business, or at least the "fine wine" business, is not so much the problem as the lower end stuff -  beer and cheap liquor. If the point is to get drunk, there's little need to lay out $30 bucks for a bottle of wine when you can pick up a half-pint of vodka and get wasted faster and cheaper. It's on reason the US Supreme Ct rejected the argument that somehow states were protecting children by restricting interstate wine sales.

BTW - just read an article noting that several states are expected to free up wine and liquor from state control because they need the money and will save since they're not going to be paying for staff and maintenance of the properties.  It's kind of funny in a way - only the government can figure out how to lose money from running the "vice" businesses.  In NYC, the gov't used to run off track betting.  How can you possibly lose money from that?  They did.

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Reply by jamessulis, Apr 8, 2012.

GregT,

I agree with the Government not being a money making machine. I was trying to point out not that things could and should be cheaper (I can get ripped on a bottle of Chateau LaFite Rothchild as well as a bottle of Chateau St. Michelle.) or Skol vodka versus Grey Goose but my point was the difference in price point for the same item such as Canadian Club, $20 dollars 1.75 litre in Illinois versus $32 dollars 1.75 litre in Oregon and Washington which is a whopping 60% difference. Who the hell gets that money? surely not the manufacturer. If not the company that makes it, who then? Must be the state of Oregon and/or Washington lending extreme creedence to your philosophy that the government can figure out how to lose money even with an inflated profit.

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Reply by zufrieden, Apr 8, 2012.

This might be a good time to clarify a few points.  In British Columbia, the Provincial government has a monopoly on the distribution of liquor in that all private wine and spirits importers and buyers must contract through the liqour distrobtion branch (or LDB as it is known locally).  For the person wanting his decent Burgundy (say, 60 dollars a bottle), this poses no great restriction.  If I lived in an isolated community, I can simply order directly - although this reduces the visual and social recompense that can come from perusing the local wineshop.

But back to the example of full privitisation in Canada - the experience of the Province of Alberta - the territory in Canada to our immediate west here in BC. If access was increased and sales along with it, the revenues should have increased as well.  This was not the case - at least not in the first years.  The government does save by selling property and dismissing staff - often employees paid at higher wages and with entitlements (although these were all negotiated fair and square).  But the Costco effect is that the lowest common denominator of taste will prevail where there is not sufficient population density to warrant a lively fine spirits retail trade.  I admit, however, that even here internet sales might negate this small objection.

My personal opinion is that there is probably little need for governent liquor stores at all - only that some will lose and some will gain with any change.  If distribution of alcohol (and possibly tobacco, if I may be so bold) is controlled by the state so that all revenues at the wholesale point of sale are collected, then what happens at the retail end - save selling to minors and addicts - might be a matter of private interest alone - provided that what is imported is not generally of interest.

Unfortunately, we cannot entirely ignore the social and health cost associated with increased access to any potentially dangerous substance - even if most of us are not controlled by it. Only, lets not have the purchase of alcohol subject to the same indignities one experiences when taking an international flight.

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Reply by Lucha Vino, Apr 8, 2012.

I am really interested to see what happens June 1.  The theories being thrown around include:

Grocery stores will make space for hard liquor.  Taking away space that is currently occupied by wine.

Distributors and wineries will be able to offer case discounts (illegal under current laws) this will favor the big wineries from California and Washington resulting in pushing out the little guys.

Big box stores are moving in - Bev Mo is rumored to be opening several stores across Washington state.  These large stores will not offer personal service or have the expertise to help answer questions and offer assistance like the small indepent shops do now.

etc. etc.

Well, from what I have seen the small wineries already do not appear on the shelves of the grocery stores.  So, dedicating space to the hard stuff won't make a difference there.

Case discounts is interesting.  You could get lower prices at larger stores that have the storage space (and dollars) to purchase by the case.  If you only choose your shop by price this could favor the bigger stores.

Big stores moving in. Will they offer personal service, have good selection etc?  Who knows.

It seems that if you have a solid business and the expertise to back it up as an independent wine shop now you should be able to remain successful.

One thing is for sure - the current independent state run liquor stores are all hurting already and most are closing their doors because they do not have the square footage to continue selling hard liquor (although I thought they could be grandfathered in).

One thing is for sure - it is going to be interesting!


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