Tuesday, September 28, 2010

"THE BATTLE OF WASHINGTON STATE" - 1100 vs 1105

IT'S ON!  One thing is for sure, there will be change in Washington.  The people of the state have salivated over the opportunity to remove the WSLCB from SELLING alcohol.  The question is "HOW?"

1100 threatens to blow up everything.
This is "Free Market" capitalism at its best. 
The gold rush is on and the big boys know it
(see the Wine Spectator article for $ spent). 
And fear mongers cry foul with scenes of drunks in the streets and nothing but cheap Chilean wine in every store.







1105 is a distributors wet dream; get the state out of distribution, while retaining their control of product flow (again see how much $ is being spent!).
High volume restaurants and box stores will not have nearly the leverage with volume purchases as they would under 1100.

What to do?  What to do?
No one knows what's really going to happen.
And what if they BOTH pass??!!
That'll be up to the State Supreme Court I imagine.

But all is NOT lost.  There are some possible solutions.

First, although this is probably going to be drastic change a little too quickly, Free Markets do eventually work for the best.

Second, with change MUST come NEW thinking.

Let's look at the issues that removal of WSLCB sales controls may incur:

#1 Loss of revenue to the state coffers.
#2 Market dominance by large "Box" chains and large producers.
#3 Increased short term and long term alcohol social and health issues.

#1 seems easy to me; RAISE THE TAX ON ALCOHOL! 
Market forces will drive down distribution and sales costs so alcohol pricing will drop. 
If the state makes up, let's say HALF the difference with increased taxes, the combination of greater sales volume and a higher tax % should cover any shortfall.

#2 is an increased awareness both publicly and financially of the very important role that the craft alcohol industry plays in the Washington economy.  Renewable, sustainable and labor intensive as any industry, the state has done only a fair job of promoting and selling Washington Alcohol Products (The WSLCB stores should have been Washington wine dominate, not just a month a year promotion!)
That means either tax Washington Alcohol Products differently than out of state products or subsidize and promote their production in every way possible.

#3 is the most nebulous of the issues.  The connection between a more free market environment and social issues is debatable at best.  There will be a need for more oversight and training in the new economy.

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