Whopping Contribution Makes This the Biggest Spending Year for Initiatives in State History

By Erik Smith

Staff writer/ Washington State Wire

OLYMPIA, Aug. 25.—The beer industry is going all-in in an effort to defeat a pair of ballot measures this year that would shutter the state liquor stores and allow hard-liquor sales in supermarkets and convenience stores.

            A whopping $2.5 million showed up Tuesday in campaign-disclosure reports filed by Protect our Communities, the campaign that hopes to defeat both Initiative 1100 and I-1105. Some $975,000 comes from the state beer and wine wholesalers association, and $1 million comes from the National Beer Wholesalers Association in Washington, D.C., the national lobbying arm of the beer distributors.

            Another $467,000 comes from the United Food and Commercial Workers, the union that represents employees in the state liquor stores.

            The campaign contributions make the beer industry by far the largest contributor to the effort to maintain the status quo – the system of state liquor stores through which hard liquor has been sold in this state since the end of Prohibition.

            And those contributions did something else. They set a state record. With Tuesday’s reports the spending on initiative campaigns this year is the biggest in state history – $23.8 million – and there’s still another ten weeks to go. There are six initiatives on the Washington ballot this year, each one attracting big contributions from business, labor and other interests. The previous record was $22.8 million in 2005.

            Commercial Considerations

            Last week, when contributions from the beer and wine wholesalers started trickling into the opposition campaign, John Guadnola, director of the state beer and wine wholesalers’ association, explained the reasoning. If either one of the initiatives passes, supermarkets and convenience stores that currently sell beer and wine would be able to apply for hard-liquor licenses. That means beer and wine would have to fight for shelf space against vodka and whiskey.

            I-1100 is the worst of the two, from their perspective, because it also repeals the state’s marketing rules. Among other things, it eliminates the requirement that alcoholic beverages be sold through distributors. That’s a hit on the wholesalers’ business. The wholesalers think they’ll weather that storm, Guadnola said, but if the marketing rules are repealed, they’ll likely have to start paying for shelf space like cereal manufacturers. It’s also likely that the big manufacturers will have to start extending volume discounts to big chains, and that will turn the marketplace on its end.

            The beer and wine wholesalers also say they are concerned that more hard-liquor outlets will make it easier for children to gain access to booze.

            What Initiatives Do

            The two initiatives each take their own whack at the system. Both would close the state liquor stores. But I-1100, sponsored by big retailers, particularly Costco Wholesale, would repeal the “three tier” system that has forced all alcoholic beverage sales to go through wholesalers. That would allow retailers to go directly to manufacturers and strike their own deals, much as in any other commodity.

            I-1105, backed by hard-liquor wholesalers, would keep the three-tier system in place. It is sponsored by Young’s Market Co. of Los Angeles and The Odom Corp. of Bellevue, a partner of Southern Wines and Spirits, the nation’s largest hard-liquor distributor.

            The $2.5 million changes the complexion of the campaign. Until now, the largely union-backed opposition campaign had raised just over $200,000. And it shows that the opposition will be a major factor in the campaign, with a budget that allows for massive TV advertising in the month before the November election.

            “We’re going to run a strong, assertive campaign to show the state of Washington that these two initiatives are risky,” said Andy Grow, spokesman for the opposition campaign. “They go too far, they cost too much, and they will cost the future of the state of Washington.”

            He noted that an Office of Financial Management report two weeks ago said the state would lose a big chunk of tax revenue under either plan – as much as $700 million over five years under I-1105.