Initiative 1100 best route for Washington state to get out of retail liquor business

IT'S time for the state liquor monopoly to go. This fall, Washington voters should support Initiative 1100, which keeps the state as the regulator of alcohol but not the retailer.

The two tasks conflict. The state is set up to police the market, not to make money from it. Retail trade is not what government does best.

In 31 states, including California, liquor is sold in private stores. Those states have the same age restrictions as this state does. They have the same sorts of drunk-driving penalties. They have the same average consumption of alcohol.

They are starkly different in one respect. Their retailers of spirits have competition — in convenience, selection and price.

This state is the home of Costco, a company that understands competitive retailing. Costco wrote I-1100 and collected most of the signatures to put the measure on the ballot. Doing this was not difficult. Several hundred thousand Washington citizens gladly signed.

This is not Costco's first fight over alcohol. Several years ago the company objected to the Washington State Liquor Control Board's rule that beer and wine wholesalers could not offer quantity discounts. Costco lives by such discounts, which allow it to offer better deals to consumers.

In the last decade, Costco asked a federal appeals court to overturn the anti-discounting rule for beer and wine as anti-consumer. The court declined. Based in San Francisco, the court agreed that Washington's rules for wine and beer appear to be anti-consumer, but said Washington could have those rules if it wanted. Maybe the people here liked them that way.

With I-1100 the people can vote on it. If the measure passes, Washington will have new rules that offer a regulated and competitive private market in liquor, beer and wine. Private sales will begin in mid-2011, and the state liquor stores will close at the end of that year.

The state will lose its monopoly markup, but its taxes on alcohol will continue. To make up for the loss of its markup, it can raise the taxes. Because of the gains from competition, the consumer would still be better off.

The Nov. 2, 2010, ballot also has Initiative 1105. It would also close the state liquor stores, but it would keep the anti-competitive rules in beer and wine, and end the state monopoly in spirits by giving it to a private cartel.

The Times recommends a yes vote on I-1100 and a no vote on I-1105.