my vote on initiative 1183

Wednesday, October 26, 2011

I’m going to lay out the thinking behind my vote on Initiative 1183. For those of you who have been in an Italian jail for the past four years, or have only recently moved to Washington state, here is all the background you need. Or at least all the background I need. Quite honestly, I’m sick of the whole debate. I am not nearly wonk enough to wade through all the conflicting claims made by the major sponsor (Costco) and the major opponents (the Wine & Spirits Wholesalers of America) in their ads.

What I have done is looked at who has what to gain, and who is endorsing or opposing the Initiative. Yes, there are some unknowns as to how it will play out, but they seem to have provided fodder for gross exaggerations and fear-mongering, especially on the opponent side.

The pro-1183 side, led by Costco, clearly has substantial business goals and potentially lucrative financial gains at stake. But oddly enough, so does the anti-1183 cohort. They cancel each other out. What really matters is how would passage of this new law affect you and me. Is it good for consumers?

If it passes, 1183 will take the state out of the business of selling liquor. It will still tax and regulate and patrol the sale of liquor. But the disconnect between marketing and selling a product, while regulating the sale and abuse of the same product, will at last be ended. Those who are in the business of making and selling wine and spirits will be able to do so. And those whose business is looking out for the public welfare, and regulating the sale and purchase of intoxicants, will be able to do so.

Financially, most if not all of the concerns raised a year ago in the failed effort to wrest the liquor business away from the state seem to have been addressed. The Official State Fiscal Study supports the contention that the Initiative will increase revenues. The exact amount is not known, but the best estimates are in the range of $400 million dollars over the next six years.

Will it result in a better wine or liquor selection at your favorite store? Yes and no. Some wine departments in grocery stores will probably shrink, to make room for spirits. Wine shops will happily pick up the slack. I cannot see (despite claims from some small distillers) how passage of 1183 would reduce their retail options. There are only a handful of state stores in existence that carry any substantial selection of craft distillers. If you add more outlets, doesn’t it make sense to suppose that more of them will carry the smaller brands?

What most disturbs me is the opponents’ scare tactics regarding increased alcohol sales to minors. Such claims are all too predictable and unsupported by any solid statistics. There will not be a vast increase in sales via mini-marts and gas stations – the Initiative specifically prohibits that. And having liquor and wine for sale at licensed grocery stores and other appropriate retailers has been the law of the land in the 42 non-control states, and if it led to such problems, we would know it.

The loss of state worker jobs? It’s a downsizing era; liquor store employees are not special. The recent claim that grocery store clerks would be in peril of heavy fines for selling booze to minors? C’mon. They already sell wine and beer; what’s different? Anyone selling beer, wine or booze has to check IDs; nothing different there.

In favor of 1183 are such folks as former Governor Dan Evans, the Editorial Board of the Seattle Times, the Washington Restaurant Association (with over 5000 member restaurants), the Seattle Restaurant Alliance, the Family Wineries of Washington State (an organization of 100+ boutique wineries), the Washington Association of Sheriffs and Police Chiefs, the Association of Washington Business, the Washington Retail Association, the Northwest Grocery Association, and numerous newspapers around the state, including the Walla Walla Union-Bulletin, the Yakima Herald, the Spokane Spokesman-Review, and the Tri-City Herald.

You can add my name to the list. I’m voting yes on 1183. I hope you will also. Not simply to put the long-overdue period at the end of Prohibition. But to send a message to those who think fear-mongering, hypocrisy and flat out lies are the way to sway elections. Enough is enough.


51 comments:

Larry Olson said...

I really appreciate your point of view on this, Paul. My wife and I are voting yes as well. I, like you, found the ad campaign by the 'no on 1183' groups really distasteful and misleading.

Too, so many small wineries and distillers sell out of their product currently and I don't see that changing. People that want to buy and drink local will continue to do so. And, perhaps, even influence their local grocer/store to search out and carry these smaller, local brands. I am having a hard time seeing any real, not imagined, downside to this entire initiative.

Thanks again for your always appreciated input.

Mike Sherwood said...

As a small independent distiller in Oregon, I am not very much in favor of Initiative 1183. Granted, the current state run system is in need of serious reform but I-1183 will be yet another impediment to selling small batch, limited production distillates to Washington consumers.

Big Box stores like Costco and Walmart and large grocery stores are not as likely to carry low volume specialty products such as my Sub Rosa Saffron vodka or esoteric foreign products such as Green Chartreuse. So sure, Jack Daniels whiskey, Absolut vodka and Jose Cuervo tequila will be widely available, but innovative products from the 40 small distilleries in Oregon and Washington… good luck finding very many of them at these huge outlets. With the 10,000 Sq. ft. threshold, there is no provision for small specialty liquor stores like there are specialty wine shops that feature local hard-to-find products.

While this initiative will provide wider access to the most popular brands of liquor, it also caters to the lowest common denominator. The trade off of wider availability of mega liquor brands may well come at the sacrifice of diversity and support of innovative local spirits. Voters in Washington, be careful what you wish for.

Larry Olson said...

Mike,

My local QFC is an example of your logic not coming to fruition. I have many times asked the manager there to carry a small, available winery's product on the shelf so I can purchase it. They have always been receptive and I have yet to be turned down to them procuring it for me. Now, that being said, I don't expect a Costco to do that for me, but I don't think it will be out of the norm for places like a QFC to do such a thing.

Also, the future of liquor and wine retailing isn't ending with Costco. Companies like Goody Goody and BevMo are very, very good about carrying a wide variety of local brands from small distilleries and wineries. Some of these retailers even accept recommendations via Facebook and other social media avenues to have their buyers take a look at. If they can sell it and make money on it, why wouldn't they offer it?

JJ said...

@ Mike S: How is that any different than what already occurs? I've never seen Sub Rosa or Green Chartreuse in any Washington State liquor store. I've also never seen D'Reyes Tequila, even though they have a Cal-based importer. I literally had to travel to the city of Tequila to buy it!

What I have seen are 1.75 litres of Patron at the SFO Costco for $80, while a .750 costs close to $60 in a Washington State store. Lowest Common Denominator Syndrome is usually the name of the retail game, and if people afflicted with it want to keep buying Cuervo they should at least have the option of picking it up with their cheese and crackers.

Overall, I think I-1183 will improve sales for some smaller wineries and not do much either way for others. That, and the chance to finally break a long-standing, odious state liquor monopoly, is good enough reason to vote for 1183. I did.

Anonymous said...

Low volume specialty products aren't on shelves now; the new law will do nothing to change that. It's a hollow argument.
It seems to me that a new breed of independent liquor retailers would be more likely to carry your product.

Anonymous said...

Paul, could you post this ibn A pdf form, so I may print it out and post it in our wine dept. thanks

PaulG said...

Anon - just select the post, go to print on your browser menu, and choose save as PDF. Voila!

Anonymous said...

If there are more outlets selling more booze there will be more alcohol-related incidents. That's not hype, that's a no-brainer...

Anonymous said...

Because of my affiliation with the wine and spirits industry, I must post this anonymously, but I still feel it is important enough to speak, and I hope you will post it knowing that I choose anonymity only to protect my business:
I'm voting "NO" because I still believe, fundamentally, that government - of, by and for the people, or at least that's the thory - is better tailored towards protecting the common interests of society than coporations. That's why they ARE corporations, because they answer to their shareholders, and NOT to society at large. the 10,000 square-foot provision in the law is a thinly veiled attempt to make sure that the only stakeholders who benefit from 1183 are big-box stores, i.e. those who can have a 10,000 feet or larger footprint. At QFC, for example, wine departments that are already under enormous pressure from the largest drinks corporations in the world (Diageo, Gallo etc.) to carry their wines to the exclusion of smaller independent wineries, will face even more intense pressure when their wine shelves are having to be shared with spirits. Where will the excess wine go - the produce department? Not likely. Under the 1183 provisions, I believe that WA State consumers WILL see fewer options for wine AND spirits, and the losers will be independent wineries, distilleries, and their local distributors. Moreover, the passage of 1183 would open the floodgates to even more deregulation in the eventual form of slotting fees (AKA Pay to play), and downward pricing pressure that will force high-overhead independent stat-ups to close their doors in the face of unmitigated price competition from national and international beverage concerns. At the end of the day, I believe that one of the reasons we choose to live in the Pacific Northwest is because a spirit of independence and local pride pervades our lifestyles - the food we eat, the things we drink, the clothes we wear, the music we listen to, and so much more. 1183, in my opinion, is nothing short of the Californi-cation of our state's beverage industry, from producer all the way down to the retailer. I believe that while the state's monopoly on liquor sales may be deeply flawed, and it is, other aspects of our state's liquor and wine laws allow independent producers to have access to the market, on an even playing field, unlike perhaps in any other region of the country. If you want Costco, QFC, Fred Meyer and their enormous corporate beverage partners deciding what you can have access to, and what you cannot, then vote for 1183. If you value the Pacific Northwest's association with idependent, iconoclastic producers who refuse to fit a mold, and the fact that we are NOT California, and have no desire to be, and are very pleased offering a modicum of state protection to those small operators who would be so "bold" as to say "Hey, I deserve a seat at the table too", then vote 1183 down.

PaulG said...

"More alcohol-related incidents"? Whatever that means. Prohibition doesn't work. For an interesting overview of why, I suggest you watch Ken Burns' excellent three part documentary. As for the big, bad corporate behemoths destroying our free-spirited PNW lifestyle - c''mon. The big bad corporate behemoth distributors are the ones fighting this Initiative! The corporations have you surrounded, anonymous, whether you like it or not. Costco is not the first, or the worst. There is a huge and hungry market here for well-stocked stores offering craft liquor and boutique wine, and those stores will appear if the laws allow them to exist.

Anonymous said...

Paul, you have provided a truthful and great overview of the pro's and con's of 1183....you have been the only one I've seen to be straight foward and balance.
One issue regarding those that are sooooo conern about minor getting their hands on liquor, if they are that concern then have an Initiative that takes all acholic beverages (wine and beer)out of all retail establishments and have them only available in State Liquor Stores, just like the old days....problem solved..
O Wait....the Beer and Wine State and National Associations probably would not go for that, because it would effect their overall sales, and volume....too bad, the safety of our children and adults need to come first....Bah, Bah, Bah....just get the State of the Liquor Business increase revenues, not taxes and go forward....the consumer and a lot of other retailers are going to benefit, beside Costco, QFC, Safeway, Trade Joes, IGA, Thriftway, Rosauers, besides the consumer...it is the right time.

Michael A said...

Unfortunately, passage of 1183 will not ensure lower prices for consumers. The initiative includes a 27% NEW tax on top of the existing taxes the state already charges. Analysts who have looked at the pricing angle have determined that it is actually more likely that WA consumers will see their final price on spirits go up by up to 40% and at the very least (and most unlikely likelihood) it will stay at about the same price it is now (which, as we know, is pretty pricey). This means the big box stores will make a nice profit, the state will be of the liquor selling business (which I agree should happen), and the consumer? Well, you really only get slightly less inconvenience in your purchasing of spirits. Unfortunatly for this reason I am planning on voting NO on this initiative. And that sucks, because I want the state out of the liquor business, mainly becuase it should lead to lower prices for the consumer.

PaulG said...

Michael A - Your comment is a bit self-serving. The 27% new tax you refer to is not a tax at all. It is a combination of retailer license fees (17% of gross revenues from spirits - not wine - sales); and a distributor license fee (10% of gross revenues from spirits sales for ONLY THE FIRST TWO YEARS). That's quite different from a 27% new tax and there is no reason to believe that it will automatically make liquor more expensive. The aim here is not to make cheap booze more widely available; the aim is to make better choices more widely available to more consumers.

Santo said...

As an independent Paul I would have thought you would swing the other way! Then again, to each his own. I'm voting NO for the simple fact that this bill gives unfair business practices to all that have wine shops that are smaller than 10,000 sq ft. I'm just about to open a shop in Bothell and would love to have the chance to bring in a great selection of spirits but wait...I'm about 9000 sq ft short. Don't get me wrong, I'm all for taking the state out of the biz but lets do it so everyone can make money, not just a few companies who will wind up controlling the whole thing. Wait...I thought we were voting to get the state out of the monopoly yet we are giving it to Costco instead so they can rake in $100s of millions of dollars per year instead? Makes sense to me.

The tactics the NO side are using are by far the most pathetic I have seen. I mean you still need to card people in order to get booze right? I emailed them and told them that if we do lose they are at fault for not doing enough to inform the public about the correct reasons.

Then we have it where Costco and other large groups will be able to purchase wine at a discount...seems fair to me. Wait...There goes that 9000 sq ft I am short of again. I say we vote this bill down and redo it next year but this time we make it so everyone has a fair trade in it, not just one company.

PaulG said...

Santo, here is the problem I see with your line of reasoning. The 10,000 square foot minimum was put in place this year specifically in response to complaints last year that there would be thousands of small retailers (gas stations, 7-11's, etc.) selling booze. So in order to meet that criticism, the 10,000 sq. foot amendment was added. Now that is being criticized for being exclusionary! It's a can't win argument. And in fact, if you read the Initiative, any existing small liquor store would be up for bid, so smaller establishments would exist. Right here in Waitsburg there is a very small (400 sq. feet) liquor store. I'm thinking I might put in a bid for it myself (don't tell Mrs. G).

Sean P. Sullivan said...

Paul, one of the things I've wondered about the 10,000 square foot requirement in 1183 is whether there were other means of accomplishing this same goal. That is, did Costco write this in because it was the only way to bar convenience stores and gas stations or were there other motives at play? It seems a shame to bar small wine and beer shops that could have carried boutique spirits just to exclude gas stations. I'd be interested to hear what the lawyers out there have to say in this regard.

PaulG said...

Sean, good question. Is there a Costco lawyer in the house? My guess is that this was the most effective way to address the gas station sales issue with a piece of legislation. I think I would have made a provision allowing existing wine shops of any size to add hard liquor, but then you would have to come up with a definition of a wine shop. And on and on. Let's just slay the beast and get on with managing alcohol sales in a non-control state like most of the rest of the country!

Rand Sealey said...

Paul, your points are right on. The argument about the 10,000 square foot rule is fallacious. It's like saying that we have to have big stores to keep liquor out of gas stations and convenience stores and then saying that 10,000 square feet is too big because it keeps wine shops out. I agree, just get the state out of the liquor business, then fix these problems later.

Eric LeVine said...

Paul,

Thank you very much for sharing your thoughts. I am yes on 1183 as well.

PaulG said...

Rand and Eric - thanks for weighing in! Your voices and experience count for a lot. I appreciate the comments.

janicejean said...

I'm voting for it because I don't like going into the liquor stores - plain and simple. It always makes me feel like I'm doing something dirty! Picking up a bottle of rum for mojitos at the grocery store along with my milk, eggs, bread (and wine) purchase will just be nice. No more dealing with those snarky WSL store clerks!

Art said...

The pessimistic view is that 1) the small wine distributors will be hurt because there will be less room for their wines in grocery stores and because the large distributors will leverage their wines into accounts along with their spirits; 2) the small wine shops will be hurt because more people will be shopping in grocery stores where they can also buy spirits; 3) the wine consumer will be hurt because there will be less selection and fewer independent wine shops after they go out of business trying to get unique products from small distributors that no longer exist and compete with grocery and big-box stores; 4) the citizens of Washington will be hurt because much of the profit from spirits will leave the state and go to the corporate offices of the chains (Costco being the one exception since it is here). Most of these problems obviously can't be fixed after the fact. Of course, I may be and hope I'm wrong; but I wanted to get this in print mainly so that I could say "I told you so" if I'm right. :-) Thanks for opening this up one last time, Paul!

Rand Sealey said...

I think the small wineries fret too much about the possible effects of Initiative 1183, especially volume discounts. Look at California. There is volume discounting and thousands of boutique wineries. I predict that if 1183 passes, boutique Washington wineries will still be alive and well. The ones that produce quality wines will continue to do just fine. They are in a completely different segment of the market from the wines offered by the big stores.

Ron said...

I voted yes for 1183 for the opponents lied and lied and never really explained how more and more kids are going to get booze that they can't already get. I believe Costco, Safeway and Trader Joes all are doing us a favor. The state should be lowering their 51% tax markup to a lot lower amount, allow for more wine shops to open and if a trade area is not being serviced by a liquor/grocery store, a less than 10,000 sq ft store can open. Works for me.

HandPeddlin'EveryBottle said...

Hi Paul, great to hear your perspective, and appreciated - the direction that my whole family will be going as well. As an importer and marketer of essentially unknown artisinal wine brands, I selfishly feel that the big guys can have each other - gigantic (and growing weekly) distributors and huge retailers can build their display castles of the same-old brands until they can reach no higher...go ahead and have at it with new regulations in this that would allow for volume discounts (because 1183 would also be getting the state out of the price oversight role). By taking the ubiquitous plonk and dropping its price at to and at those merchants who can fit 200 cases at a time, they will draw those consumers who want that same trusty bottle every day, and they can grab 6 or 60 of them while hitting Costco or Fred Meyer in the Tahoe; and benefit by paying less, if that's their brand of choice. Triple win, right? Consumer saves, retailer pulls in his desired demographic for bigger and/or more frequent buys, and behemoth wholesaler gets to send great photos of a display the size of Monroe to Modesto, and maybe win a golf bag. Cool.

What then also happens as a result - that is GOOD for the smaller wine brand producers who maybe now lose their one token dusty shelf facing at knee-height at that big store - is that the existing smaller merchants like Rand Sealy, and in fairness the more creative of even the larger guys like Whole Foods (and possibly a generation of new ones who will want to cycle back in?) will not be able to, or care to, compete even modestly with pricing on the schlock towers, so will choose to waste even less time and shelf or floor space on any of it; and instead that space and attention will reopen to all of the wonderful other things available at great values, things that will open those consumers' eyes and experiences as only wine can.

Rose colored glasses? Maybe a bit. But given the direction of the big distributor-to-big retailer relationships that have become like private clubs here, especially during this ongoing recession, the little guy has been truly squashed, and we need SOME sort of restart. I believe that the concept of more consumer choice with liquor is not the only benefit to 1183, but we'll also see more choice with smaller merchant options and the diverse wines and beers that they'll proudly offer, as well.

(only going pseudonym for business reasons...)

PaulG said...

Well stated HandPeddlin' - I am wearing the same rose-colored glasses. Maybe we can find an extra pair for Art?

Rand Sealey said...

A correction to Hand Peddlin' above. I am not now in the retail wine business. I sold Esquin in 1997 and was a consultant for ten years thereafter (mostly writing the newsletter). I have no financial interest in the wine or liquor industry. I now write an on line newsletter, Rand Sealey's Review of Washington Wines. I am a staunch advocate of smaller Washington wineries. But what I have endeavored to do with Initiative 1183 is to separate reality from fear, and have concluded that wineries have much less to worry about than they do. Do you have another pair of rose colored glasses for me? At least you can see clearer than with blackened gloom and doom glasses.

Anonymous said...

Paul said:"More alcohol-related incidents"? Whatever that means. Prohibition doesn't work. For an interesting overview of why, I suggest you watch Ken Burns' excellent three part documentary.

Saw the Ken Burns documentary - loved it. Not suggesting prohibition - that's taking the argument to an illogical extreme - a childish response. It's common sense that if x number of liquor stores selling x amount of booze contributes to x "alcohol-related incidents" (and you know what I meant - DUI, minor in possession, alcohol-related traffic accidents etc. etc.) then 4x stores selling perhaps 2-4X more booze will result in perhaps 2X (or greater) incidents. Do you deny that logic?

HandPeddlin' said...

Hi Rand, correction of course noted and apologies for relying on the legend of Esquin's wine-merchant-of-Seattle status rather than the current ownership reality...but you and I are on the same page, with PG here, and I'll see if Costco stocks a big enough supply of 'dem glasses for all of us voting yes!

KeithJ said...

I actually do deny Anonymous' linear logic regarding more stores selling liquor = more incidents as such a simple equation.

Remember that there are still gatekeepers involved in the dispensing of alcohol (cashiers, store owners, etc.), so the under-age buyers, or already pickled, concern - if all is enforced properly as intended, given increased funds realigned by 1183 for education and enforcement efforts - is a scare tactic that is bunk. Kids will drink beer and wine now and find ways to get that done if they are truly hell bent on doing so, it's an issue that needs to be dealt with at home, in school, and in families long before we blame the corner store's inventory size.

As for legal-age adults that will buy more and have more incidents by this logic just because it's there...do people smoke more, or take up smoking, because cigarettes are available in more locations? Sadly, Washington's DUI fatalities as a % of overall traffic fatalities are higher than that of CA, FL, and NY...so we are not exactly a shining example of how a more regulated system is keeping our population safer, at least by that measure. Being a nanny society and locking the cabinet as the way to handle this is a myopic view - sorry.

Mike Sherwood said...

http://washingtondistillersguild.org/index.php?/forum/10-legislation/

Here is a link to the legislative forum on the Washington Distillers Guild web site. Most all of them think that 1183 will be a disaster for small distillers. You all might want to see how it will affect us small distillers.

john4wine said...

Hello Paul,
I'm especially interested in the title of your article as sent to me by YES ON 1183 on their newsroom page, "Wine blogger Paul Gregutt supports Yes vote on 1183 – more outlets for wine is good for business." Is this your title? Whether this bill passes or not our wine shop will weather the storm, but I do not see how the passage of 1183 would create more outlets for wine sales. Do you see this happening, really? - John Allen - Vino!-WineShop, Spokane.

Cheryl said...

Whatever your values may be, the State should NOT be selling or promoting liquor at all.
In many other states where there are independent stores, that are over 10,000 SF, you get much more variety. Safeway will only carry the big brands so if you are looking for something different than you can go to a specialty store just as you would for meat, cheese, or even clothing.
This will also be good for distributors who can now service their customers more timely and get them a better cost for their goods!
We will get a better price at places like Safeway who buy in bulk and can now warehouse goods at another location other than their stores. They are already getting these discounts in other states, and this state will not loose money.

Anonymous said...

If this initiative passes is will allow retailers such as Costco and on premise facilities to purchase on credit? If so, wouldn't this create cash flow problems for small businesses?

PaulG said...

John, as you can clearly see, that is not my title. But they are correct – as I stated repeatedly, I'm voting yes.

Anonymous said...

I never understood it when I lived in Washington & I certainly don't think the old law is sensible. Just get that liquor on the selves and make shopping more streamlined. It is a silly outdated law. Cheers! from Arizona

WineBoy said...

I am not certain why someone buying on credit would cause someone else to have cash flow problems. Could Anonymous elaborate?

PaulG said...

I don't think anyone will be allowed credit if this passes. The "problem" is that if credit is offered, small wineries will have to be the bank.

John Bell said...

Paul, you are correct. The law of the land is (and shall remain, for now, whether I-1183 passes or not) that all alcohol beverage sales to retail in WA are CoD. Most (if not all) such sales to wholesale are under some negotiated credit terms. I'd love to have the flexibility to sell to retail under negotiated credit terms. It would open up my ability to sell larger and more frequent amounts of my wines. Family Wineries of Washington State is working on such legislation and will continue to press it in Olympia.

Gail P. said...

Everyone has already voted in this state, so it is a moot point to change someone's mind. But, here is my take. My biggest customer is Krogers (QFC and Fred Meyer) My distributor handles these accounts. If 1183 passes, I fear I will become more of a wine salesman than a wine maker. Have you talked to Peter lately?

Jay Schiering said...

10,000 square feet. They don't call it the "Costco" initiative for nothing. Just another way to marginalize small independent wine retailers, who might want to offer some specialty spirits. The playing field becomes even less level. Hard to believe that independent wine retailers are that big of a threat. OK, we're not, we're way too small to have much of a voice, or for this election, to matter whatsoever. Welcome to the acceleration of "too big to fail." Can't believe my good buddy of 30+ years, Paul Gregutt, who chucked the big city life, and now lives in Waitsburg of all places, has sided with big business. I supported the "Costco" initiative last year. It would have allowed me to sell selected spirits. I could have had credit terms if my suppliers approved me, sort of like a real American "free enterprise" business. But it failed. Costco learned from that failure and crafted something even more ingenious in their own self interest! There has got to be a better way. Think a bit outside the box. Auction off spirits licenses on a geographical basis for tens of millions of dollars, and then collect similar tax revenue sources as proposed by I-1183. The fix is in if 1183 fails. Gregoire and the Legislature have already approved "Plan B" that will trade our long term financial interests for short term political gain. The rich gets richer, the middle class shrinks, and the long term prospects of the great American dream continue to recede into twilight. Can you say banana republic? Soon most of the good old USA will be working for minimum wage flipping burgers at our local hamburger joint with no health insurance. But I digress. Go ahead, vote for 1183. Hope you guys all have fun shopping for junk at the big box stores. Small business and the middle class don't have a chance if big business holds all the aces because they can buy the process. You don't think $22 Million makes a difference? But I guess that's a Supreme Court issue. Nothing to do with you and me in some rosy glass small town America.

PaulG said...

Ouch! Jay, far be it from me to question your three decades of wine biz experience. No, wait a minute, I take that back. I don't follow your reasoning. Why is a de-monopolized, government unencumbered wine and liquor distribution system a threat to all existing businesses? I can see why some wholesalers are concerned, but not why you of all people would be. You don't sell booze now. Costco sells wine already. What's going to change? The 10,000 square foot proposal was put in not because Costco crafted something more ingenious; it was put in because the last year's version led to opponents screaming about 5000 liquor stores, with cheap booze at every gas station. Costco has something to gain here, but so what? So do the opponents. You think the opponents are not Big Business? Oh, and I love the idea that Gregoire and the Legislature are going to come up with an improved system. Let's see, the last significant change in Washington liquor laws was... 1969. OK then, let's get right after the next one. In no way is 1183 anti-small business. The rest of your rant belongs more on a political blog and should be aimed at the powers that put the economy into the crapper. You did get one thing right - I have chucked the big city life, and I have never been happier.

Jay Schiering said...

Oh, now I get it. 1183 permits Costco to sell liquor, but prevents me from selling selected armagnac, grappa, scotch or bourbon. Brilliant small business strategy. Instead of me being able to tap into a potential new customer base and enhanced revenue stream, I'm shut out all together because I don't have 10,000 square feet. Large grocery stores will be able to shout even louder "Buy your wine AND liquor with us, skip the extra stop!" And if I wasn't clear, I consider "Plan B" by Gregoire and her cronies to be an even worse alternative than 1183. I'm a STRONG proponent of getting the state out of the liquor business -- just not the way Costco wants to achieve it. But I can see why someone in a small hamlet, say Waitsburg for example, might really like 1183. He might then have the opportunity to purchase the existing 400 square foot contract liquor business and set up a boutique spirits emporium to cater to all the Walla Walla wine tourists, and with a little internet savvy, set up a brilliant web presence. Perfect for small business. Too bad for Jay, his small business is located in the big city where there are hundreds of gas stations that cater to the underage. Now I see why 1183 is so fair and reasonable for ALL the citizens of the state of Washington! I guess you just need to live in the right place. Boy am I dumb.

PaulG said...

Jay, if 1183 could get passed while ignoring the chorus of "Gas stations selling booze to children!", we would all be happier. Believe me, I would be all for it. But we went down that road last year and it failed. And I was taken to task for (almost) supporting last year's bill. So it doesn't really matter which side you vote on, you will piss off a lot of people, including some who you consider to be good friends. For what it is worth, I agree with you on Plan B. If you read through all the comments above, you will see that I am far from alone in voting yes on 1183, including some who own small businesses. So please, there is no need for you to keep picking on my little town. If you want to open up a "spirits emporium" in Waitsburg, I will be your very best customer (just be sure to stock plenty of PBR, Keystone, and red solo cups).

Art said...

Believe it or not, I kind of like what Jay is saying! But even more important, it may prove one of my points -- if you take liquor out of the State stores and allow anyone else to sell it, there will be less room for wine. (Jay has a great little wine shop, but if Plan-C gives him the option of selling spirits too, he'll presumably have to reduce his wine inventory.) About the only retailer I can think of who will have plenty of room for both is . . . COSTCO!

Paul Beveridge said...

Paul, excellent analysis. Thanks for taking the time necessary to wade through all the hyperbole.

Paul Beveridge
Wilridge Winery

uwp said...

Will places like Bevmo be able to ship liquor?
I always found the local BevMo and Total Wine in California to have pretty decent selection of spirits.
Total Wine had to be 10k sq/ft.

Anonymous said...

Those who drink (take-it-or-leave-its and the habituals) will find and buy will find their spirits wherever it is sold and pay for it as they always have.
Those who are concerned their product will be missed may need to become acquainted with advertising.
I'll vote to get the state out of the business of selling liquor. Long overdue.

LeftCoastRightBrain said...

Paul-
Great piece and my household of three voters have already voted YES as well.

The state is woefully inefficient are regulating business and even less effective in running them (see: System, Washington State Ferries).

While I was already in favor of this initiative, had I not been the campaign of the NO on 1183 would have been enough to flip me to the YES side. Their strategy is that the average voter is too dumb to understand that this really isn't about access for minors and "public safety". Does anyone really believe HAVING READ the language that there will be liquor stores on every corner? That teen will have unfettered access to hard liquor? The firefighters and cops they used in the ads were insulting to our intelligence. Cali has had the proposed structure in place for a couple generations and their alcohol related deaths per thousand miles driven are lower than ours.

And here's another mental exercise. Suppose some small wineries can't compete in this new business environment. Is that so bad? Life's tough, business is tougher. If your favorite winery becomes a casualty, perhaps you didn't do enough to support it. Maybe they knew how to make wine but were a little suspect on the whole sales and marketing side. Oh, well...Life's tough-wear a helmet.

What do we have 600+ wineries in the state? The WSLCB doesn't carry them all or a wide range of wines from the rest of the world. So...if Costco doesn't this is a problem? If they don't carry your favorite winery's product, why don't you take control of the situation and join their wine club? Absent that level of ongoing commitment, you can place specific orders. Yep, requires some prior proper planning and avoids the rest of the Seven P Principle for being invoked.

Our three tier system in one of 3 in the USofA and it's a relic of Prohibition. Times have changed and we need to as well.

Blair said...

Paul, I already voted YES on 1183 but was just told that my family friends (own a winery in Woodinville) have voted No. They mentioned a new requirement on alcohol producers dropping their distributor are now required to give 12 months notice. Doesn't that seem bogus? Because in WA you're only allowed one distributor, and if you choose COSTCO and decide to change, Costco has no reason to keep selling your product for that year...
In all i still voted yes, but i wonder what other hidden paragraphs are in there to benefit their situation.

Dane M. said...

Late to the blog post, but hopefully I can still contribute.

We are all biased by our place in life. I understand that anyone who has lost a loved one to a drunk driver is probably against any change that even theorizes an increased risk for such a horrible event happening to someone else. And I can accept that Jay, as a retailer, is not put in the best position with the regulations that I-1183 brings.

What frustrates me is the destructive nature of anyone who feels "The Man" or "Big Corporation" is out to get them and ignoring the logical, sensible benefits. I find it rather short-sighted that some opponents of 1183 are against it because while it helps a vast majority of the state population, it excludes them (for now) from reaping all of the benefits.

The reality for anyone walking into Pike & Western, McCarthy & Schiering or even Pete's, is that they consciously aren't at the grocery store looking for a bottle of wine. They don't want grocery store wine, and wine shops don't sell grocery store wine. I glanced at the wine aisle at a Safeway while getting some beer and saw that the $30+ bottles of mediocre Champagne were locked up in a plexiglas cage, and thought to myself "that's the best wine they have to lock up?"

If a quality wine retailer is worried about losing business to a "big box store" simply because he or she can't sell spirits, there are much bigger issues to deal with than believe Fred Meyer is going to suddenly upscale their wine selection to attract customers looking for the convenience to buy a 1.75L of Smirnoff and a few bottles of Corliss in the same place.

Just to be fair, a small wine shop _should_ be worried about a business like BevMo or Total Wine coming into the state, but even then it will be a fairly defined market segmentation as these retailers still cater to the "big box store" buyers looking for a deal on Columbia Crest Two Vines or Yellow Tail.

In the short term, wine retailers should be thankful to have the state out of the liquor business and focus on getting high quality, low(er) volume products to market at a reasonable price. Costco, Kroger and Safeway don't want your revenue.

In the long term, it should be much easier to tweak the new legislation to fairly benefit responsible businesses, large and small.

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