Bloomberg News

Washington State Says Goodbye to Prohibition-Era Liquor Controls

November 15, 2011

Nov. 9 (Bloomberg) -- Voters in Washington approved a measure backed by retailer Costco Wholesale Corp. ending 78 years of state-controlled liquor sales.

Initiative 1183 was passing by about 60 percent, according to data on the Secretary of State’s website early today.

Washington will shut state-owned stores selling vodka and other spirits by June 1 and dismantle Prohibition-era protections that prevented retailers from buying alcohol directly from manufacturers. The measure was closely watched because it could create momentum in 17 other states that control liquor sales, said Jared Koerten, an analyst in Chicago for Euromonitor International Plc.

“The results are likely to increase the pressure for privatization in most control states,” Koerten said in an interview before the outcome of the vote was known.

Costco, based in Issaquah, a suburb east of Seattle, contributed more than $20 million of the $22.7 million raised by the initiative’s supporters, disclosure filings show. Supermarket chains Safeway Inc. and Trader Joe’s Co. also contributed.

A privatization measure backed by Costco last year failed after opponents warned it would increase underage drinking and drunken driving by making liquor available at convenience stores. The initiative passed yesterday limits most new outlets to stores larger than 10,000 square feet.

License fees from 1,428 projected dealers may raise as much as $480 million over six years for state and local governments, state budget planners estimated.

Washington faces a $2 billion budget deficit. Governor Christine Gregoire proposed a plan Oct. 27 that would cut university funding and medical benefits for the disabled.

Lawmakers in Pennsylvania are debating a proposal to sell state-owned wine and liquor stores to address budget shortfalls.

--Editors: Pete Young, Ted Bunker

To contact the reporters on this story: Peter Robison in Seattle at robison@bloomberg.net; Duane D. Stanford in Atlanta at dstanford2@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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