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This week’s Q&A is with Bruce Beckett, Government Affairs Director of the Washington Restaurant Association and a spokesman for the Yes on Initiative 1183 campaign. I wanted to talk to him about this year’s effort to privatize liquor sales in the state. I’ll be following up next week with someone against the initiative. Here’s what Beckett had to say.”

Q: First, what does this initiative do?

Beckett: Well, it simply removes state government from its role as the sole retailer of liquor in the state and allows private retailers, distributors or even manufacturers to enter into the market. It does so by allowing a limited number of qualified retail stores to sell liquor. They have to be 10,000 square feet or larger, and it also will increase revenues to state and local government over and beyond what they’re currently receiving from the liquor distribution center in Washington. And it strengthens regulations on the liquor sales to minors in particular.

Q: You were involved in an initiative last year to privatize liquor. What are the main differences this time around?

Beckett: Last year, the voters responded quite strongly to the campaign that was put out in opposition. (The opposition) focused on public safety and on revenues to state and local government. There were some legitimate issues raised by stakeholders. This initiative responds to those concerns in a number of ways.

(Initiative 1183) will increase revenue to state and local government by the imposition of license fees on retailers and distributors. The fee is 17 percent for retailers on gross sales, 10 percent for distributors or wholesalers. (The 10 percent rate) does decline to 5 percent once there’s the replenishment of the revenue the state would lose. So on the revenue side, that’s how that’s been addressed.

On the public safety side, there’s a number of things. First, it limits retail outlets to 10,000 square feet or more. That’s a pretty good-sized grocery store. That’s to eliminate the concern over liquor being in convenience stores or gas station mini-marts. Second, it increases education and training requirements for those employees that will be handling liquor in those stores. Third, it doubles the penalty for selling to a minor — doubles it over what would occur on beer and wine sales.

The revenue increase, which is being evaluated right now, is projected to be over $200 million more in the first biennium and then 10s of millions of dollars thereafter. Ten million of the increase is dedicate to public safety. Those are some big feature changes from last year.

Another big change from last year doesn’t show up unless you really scrutinize this. But: Last year the opposition to this type of approach came entirely from the beer industry. This initiative does not touch the laws and regulations guiding beer distribution and sales.

Q: What about claims that, because of the 10,000 square foot limit, this would be bad for small businesses?

Beckett: First of all, there aren’t small town shops right now, so I’m not sure who’s’ voicing that concern. In the rural areas of the state, for example, many of the businesses like I represent rely on a contract liquor stores. In other words, about half of the state liquor store system is actually operated under private business owners who are under contract to the state. Those businesses are allowed to continue under current square footage that they have, if they choose to do so.
The current contractors are mostly in rural or under-served areas and they have the option of continuing in business. That’s one response to that. Second is … the larger store outlets have the electronic means to protect from underage sales.

I haven’t heard a ‘No campaign’ much but we know that there will be objections from the unions — they represent workers in current state-run stores. They will obviously be worried about jobs. We understand that. There’s going to be a lot of jobs created — I don’t know the number right now – in the stores that opt to go into this business. There may be a lot of opportunity for those employees to go to work in these other outlets.

The second issue will very likely be from the prevention community — concerns over an increased number of outlets where liquor is available as opposed to the 300-odd outlets that the state has. But there are currently between 1300 and 1500 stores that meet that 10,000 square foot size requirement. It isn’t the thousands and thousands that people thought it was going to be and that’s why the training and education, the penalties and the increased resources for enforcement and education are in the initiative.

The other thing is that nationally, where these types of systems exist there isn’t any greater or lesser rate of consumption than there are in the control states. Most of the youngsters are getting access to it out of their parents liquor cabinets.

Q: Let’s say you’re main concern isn’t over-consumption or teen drinking. Let’s say you’re a Bourbon aficionado, and your main concern is that the state liquor store doesn’t offer the craft Bourbon you’re looking for. Will this initiative change that?

Beckett: Competition breeds efficiencies and options. That’s why our members support this. It’s true — if the state can’t sell enough volume of a given brand, they’re not going to offer it. What we believe will happen is that you may not have the specialty liquor store per se because of the square foot requirement, but you’re going to have stores that offer niche products. We expect there to be niche distributors that are merged. We have members that only want to serve Italian liquors and wines. We have people doing Spanish products and Mexican products. What they’re hopeful for is that the people that supply them will start supplying those niche products as well. So I think the specialty Bourbon aficionados are going to find that someone will enter that because if there’s a market and someone can figure out how to do it, they will. Right now, they have no choice.

Q: How would this interact with the bill passed this session to look at privatizing liquor distribution?

Beckett: This would repeal that.

Q: The initiative process has been criticized by some lawmakers – including Sen. Ken Jacobsen, an outspoken critic. At the same time, the Legislature has looked into privatizing liquor in various ways over the years. Can you give your thoughts on that?

Beckett: Well, I think we all would prefer that the legislative process be allowed to run its course and that really complicated issues get debated in that forum. This is a great example of why the initiative process is a worthwhile thing to have. The voters have to respond — lawmakers have had this before them in different ways for dozens of years, frankly. There’s been a lot of vetting of this issue and this imitative reflects what has been learned. It’s a complicated thing and the legislature chose not to move forward on it. The initiative process is not the preferred public policy process but this is an example of an issue where there’s been so much vetting over the years.

I get all the reasons why Ken Jacobsen and others would feel that way because maybe some of the other things that have happened. But this is a good example of when it’s good to have that process. It was not difficult to get signatures on this.

One of the things that we’re really overwhelmed with is the overwhelming outpouring of support. A huge number of signatures came in from people just volunteering — not street corner paid gatherers. It was overwhelming to see the responses from the public.