Saturday, June 9, 2012
It's been more than a week since liquor sales went private in Washington state and a great many folks are very upset the cost of booze went up, not down.
The frustration is understandable. Clearly those pushing Initiative 1183 wanted voters to have the impression competition would drive prices down. Yet, that was not specifically said.
In addition, I-1183 was sold as a benefit to the state because tax revenue would continue to flow in even when vodka and whiskey were not flowing out. And this has proven to accurate. The state continues to tax liquor at a rate of 20.5 percent - more than twice the regular sales tax - and impose a $3.77 liter tax. That equals $2.83 for a 750-milliliter bottle (commonly known as a fifth) or $6.60 for 1.75 liters.
These taxes were on booze when it was sold at the state-run liquor stores. The difference, however, is that the taxes were included in the prices on the shelves. So if the bottle was marked $20 that is what you paid.
Now, a fifth of whiskey might be marked at $14.88 but when it is rung up, it is $20.76. That kind of surprise doesn't make people happy.
Last week, The Seattle Times conducted an informal, unscientific survey online where it found the price increased for 13 of the 20 most-popular brands in the state. Nearly 90 of 170 prices reported by Times readers were higher than they were at state liquor stores before privatization. Slightly fewer prices - 82 - were lower.
The Washington State Liquor Control Board, which ran the liquor stores but now only regulates spirits, has come unde fire.
"I've had some pretty nasty emails forwarded to me," WSLCB spokesman Brian Smith said. "I think people just assumed that it was our fault that the costs went up when the private sector took over."
The price has come down at some stores, such as Costco (the main sponsor of the I-1183) because it is sacrificing profit to maintain low prices. Other retailers are offering a few items at lower costs to attract customers into stores.
But some are simply charging what they believe is a reasonable market prices. If they sell enough inventory, that price will remain. If not, it will go lower.
Merchants could help ease this painful transition - for their customers and themselves - by doing a better job of letting consumers know what the final price of a bottle will be before they get to the checkstand.
"We have signage that details the taxes applied so that (customers) know what's on the shelf tag isn't the final price," said Melinda Merrill, a Fred Meyer spokeswoman. "It's been really good - positive comments and strong sales."
Liquor prices will stabilize as consumers figure out where they can get their favorite liquor for the best price and merchants figure out the best way to market the product.