Washington State Voters Approve Ending Government Liquor Monopoly

November 10, 2011

Since 1933, sales of liquor in Washington State have been solely by a government entity, the Liquor Control Board. 18 states are “control states” in some regard, prohibiting private liquor sales at wholesale and/or retail levels. In most cases, consumers in control states pay higher prices: Washington State consumers, for instance, pay an estimated $26.03 in taxes (payments to government) per gallon of liquor, compared to $3.30 in California where private liquor sales are permitted. This is in addition to the liquor price itself.

On Tuesday, Washington voters approved Initiative 1183 that ends this system:

Of the ballots tallied Tuesday night, about 60 percent favored Initiative 1183.

Beginning next June, liquor sales will shift from the state to grocery and warehouse stores, including Costco. It means more than 900 state employees will lose their jobs, most of them workers at state-run liquor stores.

The state budgeting office figures the number of outlets selling liquor will jump from 328 to 1,428. It also expects the change to generate an average of $80 million more in annual revenue for the state and local governments over the next six years.

Some liquor prices are expected to drop, although not as low as in California, because Washington will keep its high liquor taxes.

The campaign was a battle of corporate interests, with Costco contributing the vast majority of the money for the pro-1183 campaign.

Privatizing state-run liquor systems has been proposed in some of the other control states, which are Alabama, Idaho, Iowa, Maine, Michigan, Mississippi, Montana, New Hampshire, North Carolina, Ohio, Oregon, Pennsylvania, Utah, Vermont, Virginia, West Virginia, and Wyoming.

More on alcohol taxes here.

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