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Liquor Sales Drop In First Month of Privatization

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(Photo credit: Michael Loccisano)

(Photo credit: Michael Loccisano)

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YAKIMA, Wash. (AP/CBS Seattle) — Washington liquor sales dropped slightly in June compared with the same month the previous year, after state businesses and consumers stocked up on spirits in advance of price increases with liquor privatization.

Washington will need at least three more months to identify long-term trends resulting from Initiative 1183, the Washington state Department of Revenue said Monday.

Voters approved the measure last fall, allowing retail stores to sell liquor and kicking the state out of a business it has tightly controlled since the end of Prohibition. Consumers could begin buying directly from retailers on June 1.

However, the initiative also imposed additional fees on spirits to reimburse the state for millions of dollars in lost revenue. Many believed that would result in higher prices for consumers, but liquor sales in June weren’t down as much as might have been expected.

June 2012 sales by volume declined just 9 percent compared with June 2011. Meanwhile, May 2012 sales were nearly 27 percent higher than the same month the previous year.

Liquor prices also reflected the new changes to the state’s liquor system.

The average price of a liter of spirits declined 9 percent in May compared with the previous year, but increased 17 percent in June 2012 over June 2011.

The agency said the May drop is due to consumers buying larger bottles of liquor which are less expensive by volume than smaller bottles.

A review of sales in the coming months will held to identify long-term trends due to the inventory stock-up in May and slow startups by some retailers, as well as the novelty of having hard liquor widely available and potential sticker-shock from consumers after June 1, said Mike Gowrylow, spokesman for the Revenue Department.

The state’s Economic and Revenue Forecast Council also reported Monday that June tax receipts from liquor were $1.1 million lower than anticipated, but that much of the shortfall could be attributed to customers and restaurants stocking up in May.

Similar tax receipts for May were up $1.7 million.

(TM and © Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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