POLITICS
11/07/2011 03:00 pm ET | Updated Jan 07, 2012

Initiative 1183: Washington State Voters To Decide Fate Of Privatizing Liquor Sales

Washington State voters are being asked to consider privatizing the state's alcohol sales system during Tuesday's election.

A year after a similar referendum failed, pro-alcohol sales forces have come back with Initiative 1183, dubbed the "Costco initiative" to end state-run liquor stores in the state. Sales in the state are currently only through stores run by the state's Liquor Control Board, a Prohibition-era policy.

"Washington is one of a few states that does not have some sort of privatization on the books," said Kathryn Stanger, spokeswoman for the group Yes on 1183. "Initiative 1183 frees [the liquor board] up to focus on regulation and enforcement. This will strengthen the laws governing enforcement of the sale of liquor."

Currently eight states have only state-run liquor stores.

Pro-referendum forces are being backed heavily by Costco, the Washington state-based wholesale store, which would be able to sell alcohol in its local stores if the referendum passes. Costco has been the biggest backer of the pro-1183 campaign, with contributions totaling $22 million, the largest ever spent on a statewide alcohol referendum in Washington history. This includes an $8.9 million contribution made at the end of October.

"This initiative was written by a single company, Costco, for its benefit," said Alex Fryer, the spokesman for Protect Our Communities, the group advocating rejection of 1183. "It's a tremendous change for Washington state."

The opposition forces have received $3.6 million in contributions from the Wine and Spirits Wholesalers of America, which oppose the change in laws that would allow other stores to buy directly from alcohol distributors if the referendum passes. Currently private liquor stores have to purchase products from alcohol wholesalers, who serve as a middleman between the stores and the distributors.

Fryer said the distribution aspect is a concern to his group, saying that Protect Our Communities sees this as a way for Costco to make more money as a wholesaler to other smaller liquor stores. He said he could imagine Costco wanting to pass similar laws in other states.

"They have said they will run a similar initiative in Oregon," Fryer said. "They will move across the country, upending decades of liquor control structure."

Costco did not respond to a request for comment from The Huffington Post.

Stanger confirmed that Costco has been a big supporter of the referendum, but said the measure is not just for them. She said that the new law would allow any store over 10,000 square feet to sell alcohol, along with continuing to allow the small contract stores under the current system to sell. Stanger said that convienance stores and gas stations would not be able to sell alcohol, however -- something that Fryer contended.

Stanger noted that Trader Joe's, a supermarket chain that sells alcohol in other states, has stores that average 10,000 square feet.

"If this was about one store, I don't think we'd have more than a dozen chambers of commerce supporting us," Stanger said. "We have chambers of commerce across the state. The state chamber gave us 95 percent support."

Public safety has also been an issue in the race, with opposition forces saying that the proposed move would cause an upswing in alcohol-related issues in the state. Stanger said the referendum addresses public safety, including $10 million a year in revenue from private liquor stores to the state government that would be set aside for local public safety grants. Fryer contended that the need to set aside the money says that issues could arise. The referendum specifies that the money would be distributed to local government in the form of grants and could cover everything from the creation of DARE programs to new fire trucks.

Stanger has also said the privatization move would allow the state liquor agency to focus on enforcement instead of sales. Fryer said the move would continue to staff the liquor agency with 50 enforcement officers, to handle more stores.

"Does a new fire truck or DARE program mitigate things?" Fryer said. "You are reacting to a problem you are creating."

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