OLYMPIA — Both sides of the latest liquor privatization initiative are gearing up for a hot debate on what the measure could mean for businesses.
The sponsors of Initiative 1183 aim to remove the state from spirits sales and distribution, while continuing to direct a portion of liquor sales revenue back to state and local governments. The measure would enable privately owned stores with at least 10,000 square feet of retail space to sell and distribute liquor.
Proponents estimate private liquor sales would generate $200 million more than the current system for state and local governments in its first two years. Opponents remain wary, awaiting an official assessment from the Office of Financial Management.
A handful of groups, including Costco Wholesale Corp., the Northwest Grocery Association, the Washington Restaurant Association and the Washington Retail Association are behind the initiative. So far, they have raised roughly $1.8 million for their measure, according to the Public Disclosure Commission.
Opponents include the group Protect Our Communities, which is fighting to keep liquor sales and distribution in government hands.
The consortium that makes up the opposition includes members of law enforcement and faith-based organizations, as well as the United Food and Commercial Workers International Union Local 21. The Public Disclosure Commission reports about $15,000 has funneled into its campaign, all of it from the UFCW Local 21.
The initiative includes a clause permitting rural areas that have only stores with less than 10,000 square feet of retail space to sell liquor in smaller private liquor stores or grocery stores. The Liquor Control Board would have to approve each store.
Cost of shelf space
Not all small-store owners in rural areas would sell liquor if the initiative passes, said Pam Lindloff, associate vice president of NAI Norris Beggs & Simpson. Lindloff, a commercial real estate broker who markets retail properties, sees retail space as a serious constraint for liquor sales at some small stores.
“I’m not sure that all the grocery stores are going to be inclined to carry liquor if (the initiative) passes,” Lindloff said. “If you walk into a small grocery store, you’re not going to find a lot of shelf space for liquor.”
That prospect distresses some small-store owners.
“Yeah, I would be out of business,” said Jim Van Natta, the owner of Hockinson Market. “It’s a bad idea. The whole thing’s a bad idea.”
For the past 15 years, Van Natta has run his 2,000-square-foot mom-and-pop store. He estimated the average independently owned store has about 2,500 square feet of retail space.
Van Natta said he suspects smaller stores like his would not be able to compete with supermarkets and larger chain stores if voters approve the initiative. He would rather leave liquor sales and distribution alone.
“It’s a completely working system,” Van Natta said. “If it ain’t broke, don’t fix it. There is no reason to change the system we have.”
Proponents, including Joe Gilliam, the president of the Northwest Grocery Association, argue that the initiative would usher in a much better system.
“The current system is very inefficient,” Gilliam said.
Gilliam said he does not expect the initiative would harm business at small, rural grocery stores, since the Liquor Control Board could still grant them licenses to sell spirits.
If voters approve the initiative, projections show the number of liquor-selling stores in the state will increase by roughly fivefold to about 1,500.
In light of the anticipated increase, safety has become the primary concern for Protect Our Communities, said Alex Fryer, a spokesman for the group. Fryer and other opponents point to a study, sponsored by the Centers for Disease Control and Prevention, that suggests a connection between the density of alcohol availability and excessive consumption per capita.
Opposition members also have concerns that crime rates could rise if liquor becomes available on a much larger scale.
Gilliam said he can see why the increase has spurred the opposition’s public safety trepidation, but he said he does not expect crime rates to rise if liquor sales expand to more outlets.
“Anybody would be concerned about public safety,” Gilliam said, “but 32 other states are privatized and they don’t have any significant increase in crime.”
Mark Funk, spokesman for the “Yes on 1183” campaign, questions the opposition’s source for safety concerns. Funk said the initiative protects public safety in a number of ways.
“I think it’s an overblown issue on the part of opponents,” he said.
Proponents want to prohibit smaller venues, such as gas stations and convenience stores, from sales and distribution because the public has shown apprehension about the idea of making spirits available in such places, Funk said, adding that larger stores tend to have tighter security.
“We heard what the voters were saying (in 2010),” Funk said. “They didn’t want liquor in convenience stores and gas stations.”
Opponents argue the drive behind the citizen initiative lies not with the people but with big-box business interests, said Jim Cooper, president of the Washington Association for Substance Abuse and Violence Prevention.
“There really is not a grassroots groundswell of people who want the initiative,” Cooper said. “What part of ‘no’ does Costco not understand?”
Voters turned down Costco Wholesale Corp.’s liquor privatization measure, Initiative 1100, last year. Though similar, the latest initiative weeds out the weaknesses of the previous one and addresses voters’ concerns, backers say.
“We took a long look at Initiative 1100 from last year and we’re building on it,” Funk said.
Sponsors turned in 354,000 signatures to the secretary of state by the July 8 deadline. The initiative needs at least 241,153 registered voter signatures to qualify for the November ballot. Signature counting will begin July 18.