Liquor sticker shock stirs up Washington state drinkers

Sat Jun 2, 2012 8:48pm EDT
 
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By Laura L. Myers

KIRKLAND, Washington (Reuters) - Washington state has extricated itself from decades in the liquor business, a move that is likely to give drinkers a headache when they reach for bottled spirits on local store shelves.

Under a measure approved by voters in November, Washington on Friday became the first state since the repeal of Prohibition in 1933 to privatize a government-run liquor retail and distribution system dating to the 1930s.

The measure also changed the state's wine distribution laws, established new regulations for alcohol advertising, created new franchise protections for liquor distributors and allowed grocery stores, already permitted to sell beer and wine, to sell spirits.

The bad news for customers is that on average, per-bottle prices on liquor could rise between 10 percent and 30 percent, retailers say.

The initiative imposed a new fee structure that raises those costs by 27 percent, which will likely be passed on to consumers, said Brian Smith, spokesman for the Washington State Liquor Control Board.

On Saturday there were indications prices were on the upswing. A bottle of Glenlivet 12-year single malt Scotch whisky sold for $54.63 at a Safeway in the Seattle suburb of Kirkland. That compares to $39.95 under state-mandated prices before the change went into effect, according to a database posted on the website of the Seattle Times newspaper.

The state's markup on wholesale liquor had been nearly 52 percent. The new private-sector markup could be as high as 72 percent, including newly imposed state fees, Smith said.

"Prices have gone up because of the fees," Smith said.   Continued...