by Erik Smith
Staff writer/ Washington State Wire

OLYMPIA, May 21.—While lawmakers consider a plan that would make it almost impossible to close the state liquor stores, restaurants and grocers will try to beat them to the punch.
           They’ve filed another initiative that would shutter the state liquor stores and leave sales to the private sector. And it looks like they have learned plenty from the failure of their last campaign – they have neutralized most of the weak points in last year’s I-1100.

n     Last year the campaign really started with a single chain, Costco Wholesale, but this time there’s a coalition behind it from the start.

n     The biggest argument against the initiative last year has been nipped by taking convenience stores out of the picture. 

n     It mollifies local-government officials by giving them a big cut of the proceeds.

n     It does nothing to alarm the beer distributors, who spent millions to defeat last year’s version.

n     And by filing at a late date, advocates make it virtually impossible for competing commercial interests to file a second initiative, as they did last year.

The state restaurant and grocers’ associations announced the initiative late Friday afternoon and filed it with the secretary of state’s office in Olympia. Deadlines will be tight, but Costco can be expected to collect signatures in its stores as it did last year, and odds are good it will make the cut.

That makes three big-bucks signature-gathering campaigns for the year. The other two are already in the field. The Service Employees International Union is collecting signatures for two home-care initiatives, while initiative promoter Tim Eyman and his legions are promoting a measure that would restrict bridge and highway tolls. 
                

Enacts ‘Costco Bill’

The liquor measure will give voters a crack at the so-called ‘Costco bill’ that died without a trace in the Legislature this year. Costco has been leading the private-sector charge against the state’s Depression-era liquor laws for most of the last decade, but it has run up against heavy opposition every time, from labor unions and from alcoholic-beverage distributors whose interests are challenged.

Last year Costco took the battle to the ballot, backing I-1100, an initiative that had already been filed a third party, and by the time election day rolled around, a retail coalition had coalesced around the measure. But the opposition had marshaled its forces as well, and distributors and unions teamed up to defeat it 53-47.
           This year there’s a greater sense of urgency. I-1100 came so close last year that lawmakers right now are mulling a plan that would essentially make privatization of the state liquor stores impossible. They’re talking about taking bids from private companies to privatize the state’s liquor distribution operation. To make it pencil out, the state almost certainly would have to guarantee a captive market at the state liquor stores and maintain the state’s big markup on liquor sales, now 51.9 percent.
            Though some union jobs might be lost at the state liquor warehouse in Seattle, the plan would preserve a thousand jobs represented by the United Food and Commercial Workers at the state liquor stores.
            The latest bill making its way through the Legislature would launch a study of the idea and make it possible for the state to seek bids next year.

Under the initiative, Washington would be required to auction off its state-owned liquor-sales facilities, including stores, equipment and the Seattle liquor warehouse. The public vote would come before the Legislature could act.

     
            Neutralizes Big Arguments 

            Last year’s big argument against I-1100 was that teenagers would buy booze at convenience stores and then drive hog-wild on the highways. In this version, sales would be limited to stores with 10,000 square feet or more – about 1,500 of them statewide.

There’s an exception for areas where larger stores are not available.

Big opposition last year also was mounted by city and county governments, which stood to lose plenty under I-1100. But under the new proposal, state and local governments would share in the revenue from liquor sales. Stores approved for licenses to sell liquor would pay 17 percent of their gross revenues from liquor sales to the state. Businesses that get licenses to distribute liquor would pay 10 percent of their gross proceeds to the state for the first two years and five percent thereafter.

Advocates say the state wouldn’t lose a dime – and in fact would make more money. At the same time, it would save plenty because the state wouldn’t have to operate its 300-odd liquor stores.

“This initiative will modernize the wholesale distribution and retail sales of liquor in a way that increases consumer choice and convenience, and increases state and local revenues while continuing to protect public safety and strictly regulate the distribution and sale of liquor,” said Joe Gilliam, president of the Northwest Grocery Association.

            Will Change Distribution Laws

The measure also would alter distribution laws, though not quite as radically as I-1100 would have done, eliminating another source of opposition. Right now, every state of the union requires that alcoholic-beverage sales go through distributors – beer, wine, and in “control states” like Washington, hard liquor, too.
             Last year’s initiative eliminated the rule for every class of alcoholic-beverage distributor, making Washington a battleground for an entire industry. Beer distributors nationwide feared a national precedent and poured millions of dollars into Washington state. Most of the $8.8 million spent against the initiative came from the beer biz, in one way or another, $4 million from national trade associations and plenty more from individual distributors.
             This year’s version doesn’t wave that red cape. It allows retailers to deal directly with wineries and distillers, but it leaves existing rules in place for beer.

The initiative also would change current laws on wine distribution, allowing wine distributors and wineries to give volume discounts on wholesale prices of wine to retail stores and restaurants and allowing retailers to distribute wine to their own stores from a central warehouse.

“By allowing competition in the distribution and sale of any product, including liquor, you bring about efficiencies, better product availability and more choices for customers,” said Anthony Anton, president and CEO of the Washington Restaurant Association. “We think this initiative improves upon previous liquor privatization proposals, and we are confident that we have developed a measure that most voters will support.”

Blocks Dueling-Initiative Tactic

There isn’t much time left – initiative campaigns need 241,000 valid signatures by July 8. The timing appears to be a part of the strategy. It will take about a month for the initiative to complete all the legal hurdles – a ballot title and summary must be written by the state attorney general’s office, and then those may be challenged in court. Given the interests at stake, a challenge is almost certain, no matter how the title is written, for the simple reason that every day of delay makes it harder to gather signatures by the deadline.