Contribute to Union-Backed ‘No’ Campaign – Have Another $900K in War-Chest

By Erik Smith

Staff writer/ Washington State Wire

OLYMPIA, Aug. 17.—The state’s beer and wine wholesalers are teaming up with the unions to defeat a pair of liquor-store privatization initiatives heading toward the Washington state ballot this fall. They’re putting their money behind the “no” campaign – launched by public-employee unions to keep the state liquor stores the sole source of hard liquor in the state of Washington.

            And they have another $881,000 ready to spend – just in case they need it.

            The distributors are making a stand against both Initiative 1100 and I-1105, measures that would junk the system of state liquor stores through which Washington residents have been buying their hard liquor since the repeal of Prohibition.

            John Guadnola, director of the Washington Beer and Wine Wholesalers Association, said the organization thinks privatization of the state liquor stores is a terrible idea. Certainly its members have a financial interest at stake – they might get squeezed off supermarket shelves in favor of vodka and whiskey. But he said that’s not the only reason.

            Big Money Has Been Raised

            State Public Disclosure Commission records show the beer and wine wholesalers are the second-biggest contributor to Protect Our Communities. That’s a campaign launched with seed money from the United Food and Commercial Workers, the union that represents the nearly 1,000 workers in the state liquor stores.

            According to the campaign records, the wholesalers have spent $94,000 on what is called an in-kind contribution – $14,000 for staff time, $5,000 for a consulting firm, and $75,000 to test campaign arguments with a public-opinion poll.

            That puts them just behind UFCW, which has put up $110,502. Also ponying up $5,000 is the Washington Public Employees Association, which represents state liquor-warehouse employees. Total amount raised by the campaign is $226,340.

            It’s not anywhere close to the money that has gone into the two initiatives, of course. I-1100, a retailer-backed initiative, has raised $1.2 million, most of that from Costco Wholesale. And I-1105, backed entirely by two hard-liquor distributing companies, has raised $2.2 million. But nearly all of that money was spent gathering signatures to place the measure on the ballot, and neither one has much money left in the bank.

            Meanwhile, the Beer and Wine Wholesalers Political Action Committee has amassed a huge war-chest of its own – and there’s no telling whether it will be used to campaign against the initiative. Guadnola said it all depends – and at any rate, it’s a matter of strategy.

            Underage Access

            There are some good public-policy reasons to oppose both proposals, Guadnola said. If either measure passes, the number of hard-liquor outlets in the state could explode. The measures would allow stores that currently sell beer and wine to apply for hard-liquor licenses – up to 5,000 of them if every eligible outlet wins a license. The state auditor’s office estimated last year that the number would increase to 3,300 under a similar scenario.

            “Every gas station with beer and wine would be selling hard liquor from 6 a.m. to 2 a.m.,” he said.

            Mom-and-pop stores wouldn’t be so picky about I.D., he said. Right now youths under 21 have a one-in-20 chance of getting through the cash register at state liquor stores. “That would go to one in four or one in two,” he said. “We believe there would be a significant increase in underage access to liquor,” he said.

            That may not be a unique disadvantage, however – if true, the argument means the underage already have access to wine and beer.

            Business Concerns

            There are some key differences between the two initiatives. Initiative 1100 goes beyond the hard liquor trade and would repeal state rules that require sales of all alcoholic beverages to go through distributors. It also would repeal a raft of regulations that dictate the way alcohol is marketed. Guadnola said the initiative wouldn’t put the distributors out of business – there are some good market reasons why distributors still would be needed. But the measure would allow beer and wine to be marketed like other supermarket commodities.

Manufacturers might have to start paying for shelf space. They might be able to demand exclusive marketing arrangements – squeezing out smaller brands. And the measure would allow big purchasers to demand volume discounts – meaning that smaller stores wouldn’t be able to get the same deal as the big chains.

“The system would be really tough on the beer and wine industry in the state of Washington, as well as limiting consumer choice,” he said.

Why should the public be concerned?

Suppose you could buy beer cheaper in Deer Park than you could in Colville, he said. That’s about a 50-mile drive. For the young, it might be worth it. “I don’t know about you, but I’d go where I’d get the most for my ten bucks,” he said.

And maybe they’d open a can on the drive home.

            I-1105 a Closer Call

            The other measure is backed by Young’s Market Company of Los Angeles and The Odom Company, a Bellevue-based partner of Southern Wines and Spirits, the nation’s biggest hard-liquor distributor. That one was a closer call for the association, Guadnola said. It doesn’t repeal the marketing rules, and under 1105 the role of distributors would be protected.

            But Guadnola said the beer and wine distributors are concerned about losing shelf space to hard liquor. It is unlikely that they would have an opportunity to get into the hard-liquor trade. “My guess is that it would be extraordinarily difficult for a new distributor to get into the business,” he said.

            He acknowledged that the distributors were split on that one. Odom is a member of the association. “I can’t tell you we voted unanimously,” he said.

            Odom remains a member of the association, however.