Washington privatization, a year later.

Totally superficial anecdotal observation:

No affect on beer and wine. They were not under the umbrella of the State monopoly.

Resulted in general price increase for liquor because lost revenue by already strapped State had to be made up with taxes and there was now a new level of retail price markup required by the private retailers.

People rushed to buy State run liquor stores thinking they were buying a cash-cow and failed to do their due diligence. All of a sudden finding out they were competing with Costco, Walgreens, the neighborhood Albertsons. Going out of business sale signs pervasive.

Invasion of big-box liquor stores from California.

Someone more knowledgeable can feel free to rip apart my observations since I know nothing substantive but my opinion from the get-go was taking Washington State out of the liquor business was unnecessary.

 

I agree with the comments by NWer. Prices in the newly private stores were way higher than expected, but I rarely buy liquor so it had no real impact for me. Now those private stores are going bust - the two that I know of in Vancouver are holding closing down sales right now. And BevMo opens just up the street from me next week. Can't wait to see the range of beer that they will stock!

 

Beer and wine was always very available in grocery stores, drug stores, specialty beer and wine stores, to go from bars in any quantity. Growlers also from bars and beer stores. Even some grocery stores getting in the act with growler sales. Can't think of any significant constraint to sales for beer and wine now or in the last several years.

 

Unlike the craziness of PA, we aren't forced to buy cases --- EVER.

 

Russian River also cited the new privitization laws as a reason for pulling out of Washington.

 

The biggest upside I can see is the explosion of growlers.
Wine world
Clear view wine & spirits
Bevmos
Total wine
Plateau spirits sammamish
Whistle stop
Downtown spirits
And a ton more applying for their license to sell growlers! This is the future of craft beer and it's a great to be a part of there is no money in liquor so owners are switching to growlers.

 

I'm not sure this is true. I think it was old laws/rules that they cited.

 

Is there a correlation between getting Washington out of the liquor business and growler sales or is the timing merely coincidental? I don't see the relationship.

 

Up until recently only beer joints sold growlers. Once the privatization happened, liquor stores were now allowed to sell growlers. It makes for great options for cheap growlers.

 

NWer pretty much nailed it. You walk into a Costco and see a bottle at a great price, so the state has like a 20% tax and a bottle surcharge. They are going to get theirs one way or another. So, prices are the same or more than they were before. Also, when it was state run you could go online and search for a specific product. This is no longer so. I don't buy much hard liquor do it hasn't really affected me. To date I think liquor was cheaper and easier to find when it was state run.

I do love our growler laws, however.

 

Maybe not a direct effect, but one possible side effect on beer of having BevMo and other big private liquor/beer/wine stores enter the market (which is a direct result of privatization of liquor) is increased competition among local beer purveyors. Until last year the local bottle shops had the market to themselves, shared of course with grocery stores. But now they have to worry about these larger stores, with usually very competitive prices. The really established bottle shops like Bottleworks don't have much to worry about because they carry lots of beers that Bevmo et al. don't. But shops with higher markups might want to think about cutting their margins or they could fold in the next couple years.

Otherwise I agree w/ NWer's (and others') analysis.

 

I miss BYOBs.

Also, I paid $43 in tax on my bottle of Pappy 15.

 

Don't buy tons of liquor, and never minded going to the state stores, but from my perspective all I see now is I can buy liquor in more places and it's a lot more expensive than the nominal shelf price might lead you to believe (and in a way that it isn't easy to quickly calculate how much a bottle is going to cost you).

Fun fact: when out of state, I can now buy a single 750 ml bottle of St. Germain for my wife, pay the checked luggage fee, and still come out ahead of buying the same bottle here.

 

I agree with the statements on beer. However liquor costs have gone up significantly for the most part. Selection has not really improved in my opinion we had some really great liquor stores and they were able to pull in lots of specialty liquor items.

You can find some deals which put the price 2-5% lower than OR (which is State run). But most liquor is significantly more expensive especially imported liquor and whiskey. Here are some sample price comparisons below (this is after a year of price stabilization prices sky rocketed after the law). Also keep in mind Total Wine has the most competitive prices for the most part in WA (we have 3 stores in the state) and other stores have higher prices even on sale.

In addition there is no longer any price control so specialty items like Pappy will get marked over 20% (WA had a standard 20% mark up). I purchased 3 bottles of Pappy 15 for $75 including tax and a 2 bottles of Pappy 20 for $120 including tax right before the privatization. The state stores made sure to allocate the bottles for personal use sales and the likely hood of you getting a bottle was much higher since it depended on your dedication and luck. You can't find Pappy at these kind of prices anywhere these days.

Anyways hope this helps, I think privatization is a good thing if there are not built in taxes. The way WA structured it we now pay more for liquor with marginal gains in selection, most box stores don't have a lot of selection anyways (Grocery, Mini Liquor Stores and Costco). However if you drink from the bottom shelf then you will be ok and you will be able to buy it at more places around the same price or maybe slightly lower prices. Bottom-line I am glad I travel out of state for work and can bring liquor back because I love good whiskies and regional beers.

Price Comparisons:
Makers Mark:
Total Wine in WA $34.16 (including taxes)
OR Price: 23.95 (including taxes)
Total Wine in CA $19.77 (includes 9.9% Sales Tax)

Bacardi Silver/Gold:
Total Wine in WA $13.67 (including taxes) (most places sell for 16.07 which is 10.99 shelf price)
OR Price: $14.95 (including taxes)
Total Wine in CA $10.42 (includes 9.9% Sales Tax)

Laphroaig 10:
Total Wine in WA $70.31(including taxes)
OR Price: $49.95 (including taxes)
Total Wine in CA $52.74 (includes 9.9% Sales Tax)

George T Stagg/Rare Eagle 17:
Bevmo in WA: $105.251(including taxes) (how much I bought it for)

OR Price: $81.95(including taxes)
K and L in CA $ 93.42 (includes 9.9% Sales Tax) (how much I bought it for)

Jim Beam:
Total Wine in WA $19.69 (including taxes)
OR Price: $18.95 (including taxes)
Total Wine in CA $12.62 (includes 9.9% Sales Tax)

Highland Park 25 Year:
Total Wine in WA $424.57 (including taxes)
OR Price: $261.45(including taxes)
K and L Wine in CA $318.70 (includes 9.9% Sales Tax) (out of stock at bevmo)

Sapphire Gin
Total Wine in WA $24.51 (including taxes)
OR Price: $24.95 (including taxes)
Total Wine in CA $20.87 (includes 9.9% Sales Tax)

 

From what I experienced on the liquor store end, the main result of the law change was that we lost several class h accounts (bars or restaurants) because the distributors can sell them products at 17% cheaper than we can. Our only advantage was that we could offer a wider selection. Also it became much harder for us as a retail store to get high end rare's like pappy etc because the allocation emphasis was put on bars/restaurants. So many liquor stores are bringing in growler bars and a wider wine selections because a profit can actually be made on these products while still being competitive in price.

 

It's official. You just ruined my day.

 

Ouch.