Initiative 1100 aims to get Washington State out of the business of selling liquor. Is this a good thing or bad?

Taken from the front page of the Initiative website:
The people of Washington State desire that the Liquor Control Board focus on its core mission of education and enforcement to protect the health, welfare and safety of the citizens.

In order to strengthen the agency to more effectively educate the public, combat abuse, collect tax revenue and enforce state liquor laws, the Washington State Liquor Control Board will stop selling liquor and end its Prohibition-era monopoly on selling distilled spirits. The state will license the sale of distilled spirits to strictly regulated vendors who are already proven to be responsible sellers of beer and wine.

This initiative will improve regulations to prevent abusive and underage drinking, enforce licensing regulations and collect taxes for the State’s general fund.

The expected benefits by the initiatives supporters are to:
1) Create jobs in the private sector
2) Increase revenue for essential state services
3) Focus the Liquor Control Board on enforcing the laws and reducing alcohol abuse.
4) Consumers will see lower prices and wider selection
5) The state’s mark-up on spirits is eliminated
6) Legislature retains the right to tax liquor
7) Repeals the “Three-Tier System”, which grants monopoly privileges to middlemen, at the detriment of consumers

You can find the complete initiative here.

What is your opinion on the topic? I’d love to hear your comments.

For my initial impressions, as I have only skimmed through the document, I have several comments about this bill. I can see some benefits for some of the general population, but what about specialty bars or enthusiasts like myself? Lets briefly look at some of the points.

1) Create jobs in the private sector
Sure I can see that, but to be fair, anyone can apply for those jobs now, and you are not gaining jobs overall, just swapping one employed person for another.

2) Increase revenue for essential state services
Great, but how much money the state makes is of little consequence to me since all they do is toss it down the drain. It doesn’t really help me get products I want.

3) Focus the Liquor Control Board on enforcing the laws and reducing alcohol abuse.
I’m pretty sure that everyone already knows about the laws, and the dangers of alcohol abuse. They just choose to ignore it anyways, so all I see is money being thrown down the drain.

4) Consumers will see lower prices and wider selection
This is the one that I have the most trouble with, especially in light of topic #5. If the liquor market is opened up to the private sector, Costco (one of the primary supporters of the bill) will be getting into the liquor market. Big chain grocers, Walmart, Target, all of the big players are going to want a piece of the pie. That’s great for them, but their bottom line is profit, which means buying limited brands in quantity to get the most money. That doesn’t work for me. Out of the four state liquor stores in my small town, they carry hundreds of products and I already cannot get some things I want. You can’t tell me that these big stores are suddenly going to find thousands of feet of retail space to carry a “wider selection”. Lets be serious, Costco only carries about 5 brands of beer now. If I have to drive to another metro area, I’m no better than the current system. At least now I can find out exactly what stores have the products I want.
So the solution is specialty stores. Well, I’m not an economics major so I could be out to lunch, but we used to have a beer shop in town, and it went under because it was not economically feasible to survive on specialty products. And with prices not being fixed, these specialty stores have a disadvantage in the popular items because the big boys are buying in higher quantity and selling for lower prices.

5) Legislature retains the right to tax liquor
Currently the law allows for the State to increase the liquor tax at any time without voters consent. Changing that is not a provision in this bill, so what’s to stop that from continuing to drive the prices up?

6) Repeals the “Three-Tier System”, which grants a monopoly to middlemen, at the detriment of consumers
This is just crap, as the new bill still has provisions for creating a distribution system. It’s still “three-tier”, you’ve just placed a different middleman. In fact, since the State is the current distributor as well as retailer, it’s not even a real “three-tier” system now. There is actually no income generated by the “middleman”.

Anyways, After I really go through the document I may have a different opinion, but please let me know yours!

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