Washington Opens New State Stores

Liquor board expects a tax boost and more distribution for state's wineries

 Olympia, Wash. -- Washington state is expanding its network of liquor stores even as legislators prepare to mull the privatization of liquor distribution in the state to meet a budget shortfall. The Washington State Liquor Control Board plans to establish five new state stores, 10 new contract stores and the reopening of others.

The first of the new contract stores opened in Lacey, just outside Olympia, in October 2009, with a second following shortly after in Redmond. Two new state-run stores also have opened in Factoria and Federal Way. Pasco is home to a former store that reopened, with another store set to reopen in Maple Valley next week.

The expansion of the state’s liquor distribution network reflects a growing population. The latest estimate pegs the population at 6.7 million, a jump from 5.8 million in 1999. The drinking-age population is estimated to be in excess of 5 million people.

“We’ve been way behind in terms of keeping up with the over-age-21 population,” WSLCB spokesperson Brian Smith told Wines & Vines shortly after the opening of the Lacey store in October.

The bottom line
The new stores are also designed to raise an extra $1.3 million for cash-strapped state coffers through the 2009-11 budget period. In announcing the plans for the new stores last summer, Gov. Chris Gregoire mandated the expansion to complement cutbacks in line with state budget priorities. “We’re on pace for opens, and revenue projections,” Smith said of the new openings.

State stores account for about 4% of the state’s wine sales. The expansion of retail outlets promises to help boost distribution for state wineries, which have also benefited from a successful year-long pilot program that allowed wine tastings in supermarkets.

Bill calls for privatization of liquor stores
More recently, however, legislators have raised the issue of privatization of the state’s liquor control system. Discussions are taking place in Olympia regarding the future of liquor distribution in the state, with various models under consideration. The model of liquor distribution in the Canadian province of Alberta is one example state legislators are reviewing, as well as U.S. models. Washington state is one of a handful of jurisdictions in the U.S. that haven’t gotten out of the liquor business.

This year’s discussion follows the Jan. 11 reintroduction of Democratic state Sen. Tim Sheldon’s bill calling for the privatization of liquor stores in Washington state. Privatization would generate private sector jobs, Sheldon argued in introducing the bill during last year’s session.

WSLCB oversees 161 state stores and 173 private stores, as well as distribution and enforcement of state liquor laws at 15,000 establishments statewide.

The board had an operating budget of $236 million in the 2007-09 biennium; its current operating budget is $243.5 million.

Washington state’s debate follows a move in the province of Ontario to consider privatizing that jurisdiction’s liquor control board to generate funds for government.