I don’t know how much people know about these topics but does anyone in the wine world care about the 2 new initiatives being brought forth by the process, initiatives 1100 and 1105.
The 1st is the long standing state liquor store going by the way side and having liquor sold in store (very pedestrian explanation) and the second is essentially all liquor (wine,beer included only being allowed to be sold through distributors.)
I have my own opinions but was curious of what others thought?
Jb
[Note by Admin - I’m allowing this to be in Wine Talk as it has potential significant effect on the wine industry. Please keep the conversation regarding the political side to a very civil discourse, or we will have to move it again to the Politics Forum]
I have heard that the wine community would vote no on both.Darby English from Darby cellars has recorded a commercial speaking against 1105. I think if one were to be passed, they would take 1100 over 1105 as it would allow them to make the choice to self distribute rather than make everything through distribution.
The liquor is the sticky point. The state claims we would lose police, fire, teachers etc if either pass due to lost revenue. There are also claims that underage access would become easier. Today, liquor in Washington is the most expensive I’ve ever seen, and these would allegedly change that.
This is as politically charged as imaginable, both sides predict a 2012 style disaster if their pov is not carried through.
The reason that I asked the question especially to the ‘wine community’, is that it seems lately that us, the wine consuming and selling public has come under attack by people that ‘have our best interest at heart’.
Personally I have mixed emotions about both bills. The first bill which was introduced (essentially) by costco with a lot of money given from Kroger and $40k from Walmart will allow hard liquor to be sold state wide, in any store (already happens in most of the US) and deregulates pricing. Currently in the state of Washington if you want liquor you go to a liquor store and if you run an establishment that sells wine/beer/liquor, you are in the same boat as every other establishment as far as pricing (posted monthly to the state and is the sale price to everyone) This law would allow an establishment to work out deals and to work within the 3 tier structure to lower pricing, i.e. selling shelf space, working 5 on 1 deals and working out bulk discounts. These are just a few of the changes that would benefit companies like Costco, safeway, ect.
This seems like a good idea to the customer? Possible lower pricing, open availability to buy alcohol anywhere, possibly more brands to the market. sounds good…
The drawback would be??? (can anyone living in Chicago, NY or Cali chime in and tell me how life is better with open liquor laws?)
It seems that the drawback for someone who has never lived in these areas (cali for a short time) is that consolidation would happen, mega brands would grow and the smaller business (distributor, wine shop, beer shop, ect.) might go by the wayside.
Any truth to this? That’s why I started this thread to get real experience that I don’t have.
The other bill which is backed by Odom south, and other large distributors forces all alcohol to be sold through distributors only. Currently small breweries and wineries (there is a max cap of production) can sell direct to retail, gas station, restaurant, bar ect. This actually seems to be the killer of small business. There are a lot of small wine/beer producers that count on local, direct sales to stay afloat. This would kill them. Which seems to hurt us, the ‘wine community’ or the ‘beer community’.
From my perspective both of these initiatives would be job killers, hand power to big business and ruin our emerging industry. Sounds counter intuitive to us in the ‘wine community’. At first cheaper pricing and open market sounds good, but my question with people who experience this in their state is, is this worth it?
MO seems to be an example of the “open” liquor laws that you mention. Beer, wine, and spirits all can be sold in any sort of retail venue with proper licensure, and said license does not appear to be prohibitively difficult to attain (which I believe is a tool employed in some areas). Frankly, there appears to be no downside that I can see. Grocery stores sell spirits and so do gas stations. There appears to be no dearth of ma and pa wine shops either.
I am not sure that I understand how loosening regulation on spirits sales would be bad for small businesses. I clearly don’t see how this would cost jobs. I suppose that this is the same argument used in NY to keep wine out of grocery? The reality here seems to be that the two can co-exist.
Clearly the second issue seems to be the sort of anti-competitive, monopolistic, borderline illegal tactic that we have seen employed again and again by those who profit by insuring that the distribution of alcohol remains legally locked into a structure whereby middlemen are required to act in every transaction even where they do only harm. So for me, yes on the former, no on the latter.
Well, if both pass the entire thing will end up in the Leg for them to reconcile. I was going to vote yes on 1100 and no on 1105, but at this point I’m doing a No on both. The way they change the law (making pay to play legal, making credit payment legal, making variable pricing legal) advantages larger wineries and large retailers and distributors. It has no good consequences and possible bad ones for smaller wineries (and breweries actually).
I don’t particularly like the state liquor store system and I’m philosophically a free market guy, but I don’t buy more than a bottle or two of any kind of hard liquor, so I don’t really care. I’d like to see a freer wine system in many ways - I’d love to see retailers able to order from out of state distributors for better pricing or items not in stock here for example - but both of these initiatives seem to mix up a lot of different issues.
For people outside of the state - there are two initiatives related to liquor laws on the ballot here, 1100 and 1105. They can’t be reconciled (1105 retains a 3 tier system for things 1100 does away with it) but the main selling point to the public seems to be the abolishment of WA’s state liquor store system. However, there’s a lot of other consequences that people aren’t told about.
Basically one is backed by big retailers (costco, etc) as it allows them into the hard liquor sales business and cuts out the middle man. Basically this would really hammer the distributor tier.
The other is backed as I understand by distributors as it maintains the 3 tier system.
If both pass, it will be a mucking fess for sure.
I lean towards the first (costco) bill as it is much more free market- I do understand the concern of the small wineries as it could completely destroy the distribution tier and force them to direct market to many many many more individual retailers and fight for shelf space. However I think that will simply force them to make better wine, get more buzz and focus on the specialty wine retailers vs. relying on a distributor. I also think that it won’t actually kill the distribution tier, but force them to change their model a bit and work harder/differently to justify value. Of course I am no expert, and no economist, and this is purely my own unsophisticated take at things. The reality is that only the bigs are going to try to become their own distributors- the small and independents are going to keep relying on some sort of middle tier broker to keep them stocked up- I think the likely outcome is a stronger alliance between small wineries and their distribution partners with more exclusivitythrought that channel- again it relies on making good wine to create demand.
It’s touching that you have faith that small wineries will just need to ‘make better wine’ to be OK, but there are issues past that (and, frankly, don’t you think most of the winemakers are trying to make good wine now?).
For example, right now prices are set and uniform by law. A winery sells Wine A at Price P to everyone. New law? Store S can demand a discount or they won’t carry the wine. They can demand comarketing dollars. There’s a fair number of provisions like that in the bills - business changes that have nothing to do with helping consumers or small wineries/breweries. And before you say “but forcing a discount would lower prices” what it might well do is simply make the winery choose between lower margins (and put them at risk) and simply saying “no, can’t do that” and not placing their wine in that store, thereby actually reducing selection.
As for buying vodka at Safeway… meh. This is likely because I buy very little hard liquor and because I have a state store next to the grocery store 1/2 mile from my house, but I’m always a bit suspicious of the actual importance of being able to buy vodka, etc at the grocery store.
Thanks for posting a very interesting article. I haven’t been to a state store in years so I don’t have a dog in this fight but I do have a vote and knowing how to exercise my vote is important. As of right now I’ll be voting no on both initiatives.
Thanks for replying. I already had the answer and was frustrated that so many had just blindly said yes to both. I was hoping to start some dialougue because I have not seen any and was hoping that when we look at laws that we would ALL look whether or not it was Oregon or Wisconsin.
I see a trend in the country right now(and now directly effects me) to give the idea of opening up commerce when it really looks like it is being limited by the big guys (or being given to them).
Actually Rick I think there are a bunch of wineries that don’t really care about making great wine or are incapable of doing so. There are a lot of wineries that should have gone out of business years ago and are still somehow hanging on. I have met wine-makers that are simply wheat farmers turned wine-makers and simply trying to capitalize on the recent surge in wine popularity, or vineyard owners that are trying to crank out the tonnage vs. the quality. I think these wineries are trying to sell wine, not make good wine- there is a big difference IMO.
Point taken Scott. But the initiative changes won’t discriminate that way - they don’t care what’s in the bottle and will hurt good small wineries as much as bad ones. I think it’s naive to assume that the business impact of them will be mitigated by the quality of the wine in the bottle.
Funny enough, I had thought I used the word Naive when referring to my point of view- but looks like I used unsophisticated instead…
In any case, I would rather roll the dice with a free market approach rather than let the distibutors continue to own the marketplace. The question I have about these bills is whether either will allow retailers to direct import as PC or K&L does in California? I am continually annoyed at having to give PC money 18 months ahead to obtain a halfway reasonable price on European wine. For that matter I can usually buy WASHINGTON wines cheaper by going to california vs. going to a WA retailer. My hope is that 1100 will level the playing field here and will be a net positive for wine consumers as well as liquor consumers.
And that’s my conflict Scott… Philosophically I’m a free market guy. If this were the good times of a few years ago, I’d be inclined to vote yes. But times are very tough and I’m not sure that adding more risk for smaller operations is the way to go right now and I don’t really care about Costco. They’ll be fine either way.
I wish that the hard liquor provisions were separate - I wouldn’t mind getting the state out of that business less for pricing reasons than selection.
Point taken Rick… but the same argument could be for “what’s the importance of being able to buy wine or beer at a grocery store?” . why not make it like British Columbia (where i lived for many years)… where you have to go to beer/wine places or state owned liquor stores? 1. because it’s annoying 2. because cost are higher due to lack of competition.
I’m a free market person. Why am I being forced to go to certain stores to buy Liquor… when liquor of another kind (wine/beer) is available at every gas station.