SEATTLE (CBS Seattle/AP) — Washington’s new privatized system for the distribution of alcohol may cause the price of spirits to climb because of fees mandated by the new law.
Under voter-approved Initiative 1183, restaurants and bars can buy liquor directly from distilleries and distributors beginning March 1, and consumers will be able to buy it from private retailers starting June 1.
Fifteen companies have applied for licenses to distribute liquor in Washington state. Applicants range from a tiny beer and wine importer in Everett to some of the country’s largest distributors, according to a list from the Washington State Liquor Control Board.
The prospect of higher prices has distillers and distributors worried about making a profit while not driving away customers under the new system.
Distributors may charge such high liquor prices that some restaurants will continue buying from the state until its stores close, said Rick Steckler, president and co-owner of the Seattle-based beer and wine distributor Click Wholesale Distributing.
Although Click and other distributors plan to offer the convenience of delivering spirits along with wine and beer to a restaurant’s door — something the state does not do — their prices could be higher than the state’s by a couple dollars a bottle because of the 10 percent distributor fee imposed by I-1183, he said.
A 17 percent fee for retailers could contribute to an even bigger hike in liquor prices for consumers, Steckler said. Washington already assesses higher taxes on liquor sales to consumers than to restaurants and bars.
When Costco Wholesale wrote I-1183, it added the 10 and 17 percent fees to help compensate the state and local governments for losing the state’s liquor profits.
“Distillers are afraid that if prices go up too much, they won’t sell as much or people will trade down to less expensive items,” Steckler said. “So they’re looking at it every way they can to see how lean everybody can work.”