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BOOZE NOOZE
December 11th, 2011 by Clark Humphrey

(Cross posted with the Capitol Hill Times)

Starting in June, liquor sales in this state move to private retailers.

But only at establishments of at least 10,000 square feet, as per terms of the Costco-written and -sponsored initiative.

This means most of the new liquor outlets will be run by big retail chains, not by independent merchants.

Washingtonians will continue to be spared the garish storefronts and signage associated with commercial liquor stores in other states.

But, for the most part, we also won’t get the careful selection and knowledgeable advice an independent merchant can provide.

In and near the Capitol Hill Times‘ distribution area, three independently owned food-beverage outlets have enough square footage to qualify as liquor sellers. They’re the Montlake Deli Market, the Madison Market Co-op, and the Jackson Street Red Apple Market.

The Madison Park Red Apple and Pete’s Wines on Fairview aren’t big enough. To get booze, they’d have to convince the state that their respective neighborhoods qualify as “trade areas.” You see, there’s a provision in the new law that says the state can license smaller stores to sell the hard stuff if there aren’t other liquor sellers in their respective “trade areas.” The initiative’s text doesn’t define those areas.

However, Area 51 Furniture on East Pine and City People’s Garden in Madison Valley ARE big enough to sell liquor. And the new law doesn’t say a store has to make most of its income from food/beverage sales, since Costco doesn’t.

Most of the new places for the hard stuff on the Hill will be the chains. Two Safeways, two Walgreens, one Trader Joe’s, and three QFCs (but not the too-small Broadway and Madison Rite Aid stores). All of these companies, including QFC’s parent Kroger, sell liquor at their stores in other states.

The Washington-only Bartell Drug chain (with large stores on Madison and in the Harvard Market complex) hasn’t said if it will add liquor. Bartell just added beer and wine to its stores last year.

The state’s budding “microdistillery” movement, including Capitol Hill’s Sun Liquor, will also be affected by I-1138. How it will be affected isn’t certain yet.

Hard liquor had not been commercially made in Washington since Prohibition, until a few years ago. That’s when a few entrepreneurs, with some regulatory easings from the state, started producing and releasing artisanal vodkas and gins. Whiskey, with its longer lead time, took longer to show up.

With the State Liquor Board as their only retail/wholesale customer, these fledgling producers could make one sales pitch and have their product in every liquor store in Washington, and available to every cocktail lounge in Washington.

The new system will be more complex.

Restaurants and bars will have multiple, competing distributors from which to get their spirits.

The big chains (mostly based out of state) that will dominate retail liquor sales will get to buy direct from producers, with no wholesale middlemen. And their offerings may be much more limited than the variety in today’s state stores. (They might even take shelf space away from local wine brands, and give it to national spirits brands.)

Will a Kroger corporate booze buyer in Cincinatti, or a Trader Joe’s booze buyer in suburban L.A., bother to even receive a proposal from a small Seattle distillery (or a small Yakima winery)?

Already, the Liquor Board has stopped adding new products to its inventory, as it prepares to shut down its stores. That’s put a crimp in local distillers’ new-product launches.

The changes to the booze biz in Washington are vast and complex. And various business interests will immediately ask the Legislature to make changes to the changes.

It will take a sober head to figure it all out.


One Response  
  • ArtFart writes:
    December 14th, 201111:22 amat

    Clark,

    Pete’s impresses me as a special case. If they did get permission to sell hard booze, where would they put it? The store is already stuffed to the rafters with one of the largest collections of fine and unusual wines in the state, if not the country. It would be a shame if they were tempted to do away with that to make room for racks of mass-market whiskey and vodka.


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