There's a lot of excitement around Initiative 1100, which will be on Washington State's fall ballot.
Everyone's buzzing about how I-1100 will allows liquor to be sold in non-state run stores. Yes, you heard it right: No more price-fixing of liquor by the state. Private and public businesses will have the ability to apply for licenses to sell liquor to-go at their establishments. And most Washingtonians are rejoicing at the mere thought!
And so are big box chains, such as Costco.
A Marin Institute report says, " Costco alone has spent nearly $1.2 million (and the use of its employees as signature-gatherers in its stores) to get 1100 on the ballot."
But why would a big box store spend over a million dollars to get this initiative on the ballot?
"Initiative 1100 would remove the state’s role in the sale of alcohol once and for all, as well as remove current restrictions on volume discounts, among other worrisome provisions that would deal a serious blow to state-based alcohol regulation," says another Marin Institute report.
You may have noticed the quote, "...that would deal a serious blow to state-based alcohol regulation." Just what is this blow to state-based alcohol regulation?
To understand, you first need to take a look at the three-tier system of alcohol distribution and why it was established in the United States —and accepted by our State governments.
The Three-Tier System was accepted by the States to:
- Establish state & local control over alcohol (The 21st Amendment gives power to the states.)
- Prevent overly aggressive and abusive marketing of alcohol
- License establishments, giving oversight to law enforcement
- Generate tax revenue, ensuring state and federal tax collection from licensees
- Eliminate tied houses (Federal Alcohol Administration Act of 1935)
- Protect the retailer and consumer from abuse by suppliers
- Enforce temperance by encouraging moderation (by limiting hours of availability and requiring certain pricing, e.g., alcohol cannot be sold at a loss)
- Avoid competition over the same geographic area (producers give distributors exclusive rights to distribute their products in a given area)
- Ensure retailers are buying within their constraints (i.e., retailers are not permitted to buy beer on credit or consignment)
I-1100 entirely removes this system, eliminating nearly 40 laws that dictate how beer & wine is distributed and sold in Washington State.
Is this good? Probably not.
LEARN MORE about I-1100's impact on the Washington Beer Industry:
Washington Brewers Guild Urges "NO" on I-1100, plus commentary & discussion
Podcast - GTWF Minisode: Washington's Initiative 1100
Also on the Washington State fall ballot is I-1105, which also allows liquor to be sold via private businesses and retains the majority of laws relating to beer & wine distribution. It keeps the playing ground fairly consistent for all sizes of retailers, but doesn't have promotional funding from the big box retailers.
Author comment: With I-1100 poised for voter approval, it is surprising that there is so little media attention focused on the precedent it will set for all States, if not tied up in high-level courts and dismissed. Afterall, the last Costco ruling upheld the Three-Tier System of Alcohol Distribution as Consitutional. I clearly expect tax payer dollars to get tied up in a battle, as this initiative is likely to be approved. Please carefully review the pros & cons of each initiative prior to voting.