Photo from Wikimedia Commons
Earlier this week, voters passed Initiative 1183, which would privatize the state’s liquor system. For this week’s Q&A, I spoke with Brian Smith, Communications Director for the Washington State Liquor Control Board, about what this change means for the WSLCB.
Q: Private stores will be able to sell liquor in June of next year – what’s happening before then in order for that transition to occur?
Smith: Immediately, there’s a number of things. We will need to do some emergency rule making to make sure that our existing rules and laws coincide with the initiative, because it goes into effect Dec. 8.
We need to do something about the trade area, which you may recall was an issue during the campaign. We need to develop licenses for people to apply for: The spirits retail license, the distributor license do not exist. Then you have to have about 60 days to process them. So, for example, if you’re a grocer, you need to apply for a license, then through that process we work with local governments – all that takes generally about 60 days.
Q: You mentioned “trade area.” Is that a definition that will be established before any licenses are issued, or will that be a case-by-case basis?
Smith: We don’t know yet. We are contingency planning, but that is certainly something that’s going to have to happen very soon.
Q: If you read the initiative, it’s talking about distributors and retailers. Can you describe how that system might look?
Smith: Right now, there are beer and wine distributors in Washington. They do the jobs of not only collecting the product from manufacturers, then move it out to retailers. Usually, they provide a service: They go in and stock the beer shelf, etc. I would imagine it’s going to be something like that under this scenario. They’ll bring in the liquor; handle marketing it on shelf space. The retailer is going to be just that – anyone that meets the criteria of the initiative, which is 10,000 square feet or larger, hasn’t had a public safety violation in two years. Contract stores are grandfathered in but they’ll have some changes: Right now, a contract store is a small business. We own the inventory and we pay them a commission on their sales. Under 1183, they will have to purchase their own inventory, and that runs, on average, $125,000, which is pretty steep for a small business.
Q: I also noticed in the initiative that, while state liquor stores will close next summer, there will be a one-year period for the state to get rid of all the assets. Does that mean the liquor stock? The buildings?
Smith: Assets like land and buildings. We’ll have the distribution center and we’re supposed to auction off the existing state store license locations. (more…)