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DRINK, UP

Liquor Prices in Washington State Go Up After Privatization Push

'The private sector is adding its own markup'

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by Dain Fitzgerald

Staff Writer t

Image: Adweek

Advocates of privatized liquor sales in Washington state have some 'splainin to do: prices for the hard stuff have increased since the Evergreen State took its dispensation out of state hands, reports the Associated Press.

Washington passed Initiative-1183, which privatized the sale of liquor, in the first half of 2012, and in the time since has seen the average price of rum, vodka, gin and whiskey go up 10%, despite the initiative's backers' suggestion that privatization would increase competition and thus bring prices down.

"The average statewide price per liter of hard liquor after taxes was $24.06 in October," writes AP. "That's slightly less than the average price in June, right after privatization, but it's still higher than the average of $21.59 at state liquor stores in October 2011."

While the initiative removed the state's whopping 51.9% markup, it appears those who ply their trade in drink are compensating. "The private sector is adding its own markup as well," said Brian Smith, a spokesman for the state's Liquor Control Board.

But as the meme says, perhaps they're doing it wrong. In 2011, David Nelson of the Seattle Post-Intelligencer compared Washington's state-managed liquor prices to California's privatized counterparts, and found the latter to be an order of magnitude cheaper. For a 750ML Captain Morgan Rum, $39.95 to 19.74, respectively. For Johnnie Walker Red, $54.95 to the Golden State's $29.62.

Whatever the source of Washington's higher post-privatization liquor prices, it wouldn't seem to be privatization per se.

Via AP and the Seattle Post-Intelligencer.
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Comments (view in Forum)

  • Keyjo
    !
    We have state sanctioned liquor stores in Oregon, too. And we too, are looking to privatize. I think that initially, private marketeers may try to gouge the consumers, but as competition grows, prices will drop. Note that there are liquor stores, liquor purchase points aplenty, like supermarkets, convenience stores in California. Soon Washington will be the same.
  • Keyjo
    !
    @Neo_NtheMatrix
    Oh come on, Christians drink. Didn't Jesus turn water into wine? But kudos to you for choosing to NOT drink.
    And yeah, we DO agree on privatization.

  • View all 14 replies >

  • Denizen_Kate
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    Sounds like sate-sponsored drug dealing to me. It's too soon to tell whether or not this privatization movement will result in lower prices. Right now, liquor dealers are taking advantage of the extra profits revolving around the absence of state fees, but if sales start to drop, so will the prices and the price fixing.
  • Denizen_Kate
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    @Neo_NtheMatrix - Yes, Neo, even you and I can occasionally agree on a topic. I like that. Let's try to find more to agree upon, shall we?
  • dlw
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    @Denizen_Kate and Neo: Now, why can't our government have constructive discourses like you two. Kudos.

  • View all 6 replies >

  • o
    Sharpshooter
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    GOVERNment..... they need to stay the hell out of business. Why is this even a discussion, it's like the tax payers helping overgrown build lemon-aid stands and footing the bill for the spoiled lemons, spilled sugar and gallons of free samples they give away.
  • u
    RobertJHarsh
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    Liquor is state sold here in Ohio and being able to go into a State Store on a SUNDAY MORNING and buy hard booze is just great. Pricing is kinda tough and if I need a large haul I just go into Kentucky where the prices are a little better. But if I want some Vodka for Breakfast, Ohio is the place to be.
  • jessejaymes
    !
    Remember when the GOP deregulated Cable TV? They said it would cause competition and prices would go down. I now pay 10 times for basic cable compared to what I paid before deregulation.
  • u
    Libertyiskey
    !
    Skipped over the part where it shows one example of the privatization liquor being cheaper than state run liquor?

    "But as the meme says, perhaps they're doing it wrong. In 2011, David Nelson of the Seattle Post-Intelligencer compared Washington's state-managed liquor prices to California's privatized counterparts, and found the latter to be an order of magnitude cheaper. For a 750ML Captain Morgan Rum,$39.95 to 19.74, respectively. For Johnnie Walker Red,$54.95 to the Golden State's $29.62."

  • View all 6 replies >

  • jessejaymes
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    Ok here comes the middle ground guy again. Hard liquor is bad for you. It destroys the membrane around the brain. It causes you to do stupid things which often result in being arrested, getting your ass beat or even death. Pot is more mellow and causes far less aggression. Hard Liquor causes more aggression than even Heroin. If fact hard liquor causes as much aggression as any street drug except Angel Dust. That's some pretty crappy company to be keeping. Booze makes you fat, cause you to either not eat or eat infrequently and irregularly. In short it just breaks down your body. So you ask me who should make the money from it? Nobody. And damn sure not the state who shouldn't be making a profit off of selling poison.
  • ConserveUSA
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    Private Moon Shine sure is the knock out juice. I saw some raid videos from new sources and I saw some DEAD RATS in the Mash.
  • jessejaymes
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    @jessejaymes I just don't drink. I played guitar in bar bands for years and watched drunks from the stage. I really don't like acting like that and I never liked the taste of alcohol really. Fruity drinks but that's sugar taste. Don't need liquor to get a sugar taste. Never liked the taste of beer. I'm just not a drinker. After my sibling was killed by that drunk city manager or whatever he was, nobody in the family has much use for drinkers and we're not religious at all.
  • DARSB
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    Growing up in Iowa in the 1960s the liquor was always sold at state liquor stores. When the state got out of that business, as I recall, the prices did go up - but so did selection.
  • jessejaymes
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    Well they're taxing the daylights out of legal pot (which is fine with me) I think it's time for the States to close their deficits by putting a 20% sin tax on alcohol. Or 30%. I don't care. I don't drink and if I have to pay three times what it's worth for legal pot then so should the drinkers have to pay.
  • o
    Republican5001
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    @ConserveUSA actually you may want to go to the liquor store...

    a fifth of booze is 750 ml or 25.5x ounces a shot is 1.5 ounces and that makes 17 real shots in a fifth with .1 ounces left

    not sure what the national average of shot of liquor is anymore but will say industry standard is usually $5 bucks a shot and 17 shots in a fifth of liquor and you can see you actually spend more money going to the bar versus drinking at home. But atmosphere is why most go pound beers in the bar scene.

    Double all your costs if you are going to a gogo bar or strip club and quintuple your cost for anything upscale. Have seen shots of upscale tequlia go for as much as $50 bucks a shot.
  • Dan_Tien
    !
    The price of liquor went up immediately once it was privatized, workers in State liquor stores got laid off and the incidents of shoplifting of hard liquor went up. I wonder if the move to privatize liquor sales had anything to do with the recent legalization of marijuana? I hear that the price of ganja is down. Do you suppose that it will be available at the 7/11 soon, too?
  • u
    CommonSense
    !
    The price went UP when privatized.
    Wasn't the argument for making it state-run that the state could then reduce the impact of things like alcoholism and drunk driving? But if the state is keeping prices DOWN that means in all likelihood the state was making things worse.
    State regulations on alcohol are one thing, but the state shouldn't be in the business of selling it to people.
  • kathyparsell
    !
    Virginia had this discussion last year and for my part I am glad the state kept selling. If I drive into TN, roughly an hour away, where liquor sales are privatized the prices are generally higher than what I pay at home. Besides that,it is the only thing that the state of VA operates that makes money.
  • Post Removed by Moderators
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    Justin_Case
    !
    When you 'privatize' something, costs go way up. Just look at private schools. Private health insurance. When Enron took over Houston electrical power, prices rose drastically (far worse when they got their hands on California's power grid in 2001)
    Private companies pay their employees more, must turn a profit, must pay taxes, and must pay a $50-million CEO. The bottom line is this: privatization = higher prices
  • wild_turkey6
    !
    Damn government trying to keep homemade liquor out of our hands. You can craft your own beer, make your own wine, but the minute you distill your own liquor, it is a federal offense.
  • u
    debate
    !
    Having publicly owned utilities and services has been likened to communism whereas in the case of countries like Australia it has worked well at keeping a lid on the cost of living but now everything is privatised everywhere and the cost of living is outstretching incomes and that is bad for the economy.
  • dlw
    !
    I don't care who sells it. Raise the price through the roof. We bitch about guns, we bitch about abortions, we bitch about this and that while alcohol continues it deadly destruction of the populous by drunk drivers, drunk spouses abusing one another and their children, and drunk politicians flushing us down the toilet among others. Wake up! Alcohol is a major problem.... Having said that, I enjoy a beer or drink occasionally but I'll pay the higher price if it helps solve a few social problems. This makes me wonder if the AA is booming with members.
  • u
    AceLuby
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    It should be privately controlled, but not in the way the WA law works. In this law the only places that can sell liquor are dedicated liquor stores and big box retailers, of which only Costco is eligible. This law is a giveaway to the big box store and does not usher in true competition, it simply shifts the profit away from the people and to Costco.
  • Speedieg
    !
    I don't think govt should be in business. This should be privatized. If the price is high it should force demand down and then prices will follow to boost consumption unless there is some artificial mechanism at work. More than likely these early high prices are an attempt to learn how much the market will bear.