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Originally published August 21, 2010 at 10:03 PM | Page modified August 24, 2010 at 11:41 AM

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Liquor initiatives stir up old dispute

People who think the state should get out of the liquor business could push it out with two measures on the November ballot. One initiative goes even further, killing Prohibition-era regulations meant to keep alcohol relatively expensive and hard to get.

Seattle Times business reporter

Pushing the state out

Big distributors and retailers have two ways they want to push the state out of the liquor sales and distribution business:

The distributors (Initiative 1105) Take the state out of the liquor sales-and-distribution business and allow retailers to receive volume discounts on liquor.

The retailers (Initiative 1100): Do the above, plus allow volume discounts for retailers on beer and wine and eliminate other regulations such as "uniform pricing," which ensures all retailers pay the same price for alcohol, and a ban on manufacturers issuing credit to retailers. It also would allow retailers to buy directly from manufacturers rather than going through distributors.

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People who think the state should get out of the liquor business could push it out with two measures on the November ballot. One initiative goes even further, killing Prohibition-era regulations meant to keep alcohol relatively expensive and hard to get.

The battle is starting to look like it did in the 1930s, with free-market advocates fighting against people who view cheap, easily available alcohol as a precursor to increased abuse and violence.

"Both initiatives would make it more convenient to buy alcohol, and I think that's why consumers are so interested. They move in from California and other states, and they're going, 'Why can't I buy a bottle of liquor after 8 p.m.?' " said Jan Gee, president and chief executive of the Washington Food Industry Association, which represents independent, family-owned grocers. Washington has been among the strictest states in limiting access to alcohol, dating back to the end of Prohibition in the 1930s.

Privatize liquor sales

The two ballot measures — Initiative 1100, backed by Issaquah-based Costco Wholesale and other big retailers, and Initiative 1105, crafted by alcohol distributors — would privatize liquor sales in Washington state.

If either passes, the state would close its stores and distribution center.

Initiative 1100 would remove price regulations, allowing retailers to receive discounts based on the quantities of liquor they sell and buy alcohol on credit from manufacturers, practices that have been banned for more than 75 years.

It also would allow retailers to buy directly from manufacturers rather than going through distributors.

Costco has worked for years to try to make alcohol sales in Washington pencil out more like selling toilet paper, trying unsuccessfully in the Legislature and the courts to change the state liquor-control system.

Initiative 1105, the distributor's initiative, would allow retailers to have volume discounts on liquor, but not wine and beer. Under this measure, retailers would still have to buy alcohol through distributors.

Under both measures, the 5,200-plus stores that sell beer or wine in Washington could apply to sell liquor, dramatically raising the number of stores selling liquor from 315 now.

If both initiatives pass, differences can be resolved in the courts or by a two-thirds vote of the Legislature, said David Ammons, a spokesman in the Secretary of State's Office.

Back to Prohibition

The debate is largely economic, but it also reaches deeply into the roots of the American West, when saloons were a divisive issue, seen as public-safety threats by some and engines of economic growth by others.

"For us, 'saloon' is just an old, classy word for a bar," said Dean Gerstein, vice provost and director of research at Claremont Graduate University in California and co-editor of the book "Alcohol and Public Policy: Beyond the Shadow of Prohibition."

Before Prohibition, he said, "for a lot of people, a saloon was a place where guys went to throw away their money so they could come home and beat up their wives, a place where criminal deals were done and people got knifed, and where prostitution was as much what the house did as drinking."

Washington was among 13 states that rebelled against saloons so strongly that they banned alcohol earlier than the nationwide ban in 1920, in Washington's case, six years earlier.

After Prohibition ended in 1933, Washington became one of 18 so-called control states that tried to squelch the profit motive by putting the government in charge of liquor distribution and sales.

It remains one of the most restricted states for alcohol sales, with liquor available only at state stores, most of which close by 9 p.m. Only one-third are open Sundays.

Washington also has markups, taxes and rules that keep prices high, and it bans advertising.

"The noble intent behind things like state liquor stores is so that people are not promoting alcohol like snake oil," Gerstein said.

Idea to limit access

Indeed, it is the rare liquor-store worker who pushes the latest tequila or touts the best scotch for your dollar.

"The system was set up to limit access," right down to the way liquor-store workers are paid, said Rick Garza, deputy director of the Washington State Liquor Control Board.

"If I give a person the same salary whether they sell one or five bottles, you're going to have what we have, a really high 'no-sale-to-minors' compliance rate," he said.

About 95 percent of the time, minors who try to buy liquor in state stores are turned away, Garza said. At grocery stores that sell beer and wine, stings show that minors are turned away 76 percent of the time.

That will change if one of the voter initiatives passes, said Snohomish County Sheriff John Lovick.

"There will be 10 times as many places to buy hard liquor, and that's going to increase the chances of children buying liquor illegally," he said. "The word's going to get around. With every minimart out there selling liquor, they're going to try it."

He does not speak for the department but personally opposes Initiatives 1100 and 1105 because of problems with underage drinking, drunken driving and alcohol-related domestic violence.

The state has a conflict of interest in selling alcohol while also overseeing alcohol laws, said Ashley Bach, spokesman for the businesses behind Initiative 1100.

Over the past 75 years, "the notion of controlling consumption has been replaced with alcohol as an unlimited source of state revenue," he said, pointing out that only 80 of the liquor board's 1,200 employees work in enforcement.

Washington residents drink alcohol responsibly, Bach said, and "should be allowed reasonable access to it."

Per-capita consumption

It is impossible to know how alcohol consumption might change if liquor were available along with wine or beer.

Under the current system, per-capita consumption is about the same as in California, where there are 359 stores selling liquor for every million residents, compared with 48 stores per million in Washington.

That does not mean Washington consumption would remain steady if the number of stores rose, said Jim Cooper, vice president of the Washington Association for Substance Abuse and Violence Prevention.

"If we're selling liquor until 2 a.m., to me there's a natural jump to an increase in crime, violence and automobile deaths, especially in the wee hours of the morning," Cooper said.

He also likes Washington's high prices, which studies show deter alcohol abuse.

The World Health Organization said last year that increasing alcohol prices can reduce alcohol abuse. Even heavy drinkers are sensitive to price changes, it said.

And that is one thing all sides agree on with the new initiatives: They would mean lower prices for consumers, especially on liquor.

As an example, Costco said a 1.75 liter bottle of Maker's Mark Bourbon costs $61.95 at a state liquor store in Issaquah. In Stockton, Calif., Costco charges $33.99 for the same bottle.

A bottle of Absolut Vodka at a state liquor store is $42.95. In Stockton, it's $22.99.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com

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