NW Peaks Brewery

Please vote NO on inits 1100 and 1105

An upfront apology to bring any politics to this blog.  I’d much rather keep it NW peaks and beer centric.  However, after talking to a good friend of mine and respected brewer, I have a few things to say about the initiatives on the ballot.  I wanted said friend to write up his assessment.  After all he is practicing alcohol law and knows a lot more than I do about the ins and outs of the current alcohol laws and what they serve for.  As it turns out, the negative ramifications of initiatives 1100 and 1105 are very big, so when you see the initiatives on the ballot, vote no.  Of course, many of you have already mailed in you primary ballot, but for those that haven’t, again, please vote no.

I am all for privatizing liquor, but it has to be done in a responsible way, repealing nearly every law regarding alcohol is not the way to do it.  The following are a few random blurbs about the current state of alcohol sales/distribution/initiatives that highlight some of the changes (apologies for no hard numbers, I am just getting this posted):

1) Loss of revenue for the state.  This kind of needs to be dissected into a) taxes, and b) “markup.”  Taxes will be unchanged, the state will keep getting those.  The revenue generated from the “markup” will be gone.  Currently the state pays for the entire liquor control board with revenue generated from that markup, among many other things.  The control board is forcing mandatory leave without pay because of budget constraints (I am sure this resulted in a slightly slower than normal processing of my permit application).  There are no plans for the loss of hundreds of millions in revenue.

1B)  Increase of alcohol prices.  As mentioned above, the state taxes won’t change.  This is why alcohol costs so much in the first place, not the markup.  The grocery stores will want their cut and will mark up alcohol as much or more than the current liquor stores.  This will result in the same price (or higher/lower, depending on the markup of the specific retailer).  However, with the loss of the revenue for the state it is almost guaranteed that some taxes are going to increase.  What does the state tax?  alcohol, gas, and tobacco.  Taxes on these will undoubtedly increase yielding a more expensive product in the end.  I’ve heard a lot of arguments about “well, CA has cheap liquor prices, isn’t that because it’s private?“  Well, no.  CA has a state income tax.  It has high property taxes.  CA does not tax alcohol to the extent of WA, that’s why it is cheaper.  Privatizing the sale of alcohol in WA will not remove the taxes that make it so expensive in our state.

1C) Compliance with rules and regulations (one of which is underage drinking).  Going back to the CA versus WA example, CA has one of the highest numbers of liquor stores per capita and WA one of the lowest.  At least for underage drinking there is an inverse correlation, not likely to be attributable to coincidence.  Projections are that the WA will have one of the highest number of liquor stores per capita in the states.  The liquor board would never be able to oversee additional liquor stores since it’s having trouble keeping up with the current ones.  Also, most states have a limit on the number of liquor stores per area and there is no such provision here.

2) Loss of jobs.  … from the Liquor stores, etc.  These jobs won’t likely be replaced.  Costco or WalMart, won’t add jobs (or not enough to compensate) because they now would be selling liquor.  They will just add liquor to their normal product line where they already have systems set up and employees to handle it (purchasing, stocking, inventory, etc.).

3) Tied bars.  Currently this is illegal.  With initiative 1100, this would be totally legal and would allow breweries to pay restaurants/bars to solely carry their “line of beers“.  I see plusses and minuses to this.  The one plus is that newer bars and restaurants that NEED capital can get it.  The minus (heavily outweigh the plusses) is the loss of variable taps at some places.  I see the larger effect in places that do not promote themselves as a beer first place.  Let’s take a neighborhood where I have the most familiarity as an example: Greenwood.  The naked city is a great establishment and they take pride in their tap list (22 taps, always rotating).  There is no way this law would change how they did business.  The Pig ‘N Whistle, on the other hand, has a smaller beer list and promotes themselves more as a restaurant and normal bar.  I can easily see them taking a large lump sum of money for the right to control their taps.  The net result would really be only one or two guest taps, or micro taps and the average consumer would not care (Shock top is a fine microbrew, right?).  However, those 1 or 2 taps are the taps that independent nano and micro breweries are fighting for.  Indeed, losing 1 or 2 taps at many establishments state wide would definitely hurt the ability of the nano-micros to compete.

4) Distribution.  The other initiative gives full control to distributors.  Nano and microbreweries won’t be able to self distribute (nor will small, up and coming wineries – I think wineries will be hit hardest).  All small breweries will be at the mercy of the distributors for promoting, selling, and distributing their beer.  As the size of the brewery decreases, so does the incentive for them to pick up the beer line.  This again will stunt the growth of the nano / micro breweries and will be a bad thing for the beer industry in the pacific NW.

I could go on and on, but I’d rather find a way to brew some beer as a nano brewery.  Please help our cause, and that of all the small independent (or not so small or not so independent) breweries/wineries and vote no on initiatives 1100 and 1105.  While privatization of liquor sales is a fine (and good!) idea, these initiatives contain unprecedented roll backs to liquor laws.  These liquor laws are there to create an even playing field for small and large entities alike.  If you look at the companies funding the initiatives, they are the large alcohol/brewery conglomerations, and the largest distribution companies in the states, trying to use their strength to get more control.  Thanks!

A seattle times  link, with other news stories within that link.  Please comment if you want to include any hard numbers that I omitted and/or notice any glaring misrepresented information.