Wednesday, October 13, 2010

An open letter to Washington state voters

Dear Washington State voters:

Do you drink wine, beer or liquor?

If so, you should vote "Yes" on initiative I-1100.

There's a lot of beer-distributor money being spread around Washington to try to confuse you. There's a competing initiative, I-1105, that was written by Washington Beer and Wine Wholesalers to protect their monopoly. And there's a lot of sanctimonious blather on the airwaves right now about health and alcoholism and minors drinking.

You know who's funding that blather? Beer and wine wholesalers. They don't really want Washington residents to stop drinking, or to drink less. What they want is to ensure that they keep getting a 30% cut.

It's hard to blame any company for trying to protect its business model, even if that model is an outdated government-supported monopoly. What gets under my skin is outright lying about intentions. If wholesalers want people to drink less for public-safety reasons, they don't need voters' support: They can simply stop selling beer and wine.

Costco has been the main supporter of I-1100, and it's not doing so out of public interest either. Costco wants to buy wine without a middleman so it can offer lower prices that encourage people to join.

But unless you're one of the 33% of American adults who don't drink, your interests align with Costco's.

Why should you want to pay higher prices for wine, beer and spirits? You could argue that there's some societal benefit in doing so if the premium you're currently paying over prices elsewhere in the country went to the state. That's an ongoing argument in Pennsylvania.

But in fact, that huge percentage you're now paying to beer distributors is going into corporate coffers. And when it is spent on government, it's not used on schools: it's given to your public officials in an open (and often successful) attempt to influence them.

Moreover, Washington is a sophisticated state in just about every way: urban planning, transit issues, and most political debates. And the quality of top Washington wines is second to none.

But your state-run system of liquor shops is an anachronism. It's the kind of nanny-state government expected in places where most citizens aren't well-educated. At least 36 American states believe private businesses, and their employees, are capable of selling liquor responsibly. Do you believe Washingtonians are incapable of doing so?

Don't let money-grubbing beer distributors confuse the issue.

If you don't drink alcohol, at all, go ahead and vote against I-1100. Keep Washington on the level of fellow control states (and intellectual capitals) like Alabama, Idaho, Maine, Mississippi, Montana, New Hampshire, North Carolina, Ohio, Pennsylvania, Utah, Vermont, Virginia and Wyoming.

If you drink alcohol, remember what happened when a nation of voters let sanctimonious arguments get the better of them 100 years ago. Drinkers voted for Prohibition; it couldn't have passed without them.

Vote your own interests. Don't stand with the 33% who teetotal and see your state as Alabama or Utah. Have some pride and confidence in your state.

Vote "yes" on I-1100.

Sincerely yours,
W. Blake Gray

ADDENDUM: Sean Sullivan has done an excellent job of breaking down the bill's actual impacts. His piece, which does not urge a vote one way or the other, is better than mine.

(PS: Drink more Washington wine! Seven Hills, Hedges, Pacific Rim and Chateau Ste Michelle are some of my favorites. But that's a topic for another day.)

17 comments:

Anonymous said...

I am well educated and take a bit of offense, ok, not that much, to your argument that equates a lack of education to a "no" vote on this initiate. I am not a fan of the three tier alcohol distribution system and suspect there are ways to address issues regarding selling hard liquor at 2:00 a.m. at the local gas station. But, more importantly, I am not a fan of legislation by initiate where the proponents of the initiate do not have to address collateral consequences of the proposed legislation. In the case of 1100, as I understand it, the change will result in loss of significant revenue with no proposal to make it up. As much as I support the small wineries, and I buy way too much wine directly from wineries in Washington, I am not sure I can support this initiative.

Anonymous said...

I am well educated and take a bit of offense, ok, not that much, to your argument that equates a lack of education to a "no" vote on this initiate. I am not a fan of the three tier alcohol distribution system and suspect there are ways to address issues regarding selling hard liquor at 2:00 a.m. at the local gas station. But, more importantly, I am not a fan of legislation by initiate where the proponents of the initiate do not have to address collateral consequences of the proposed legislation. In the case of 1100, as I understand it, the change will result in loss of significant revenue with no proposal to make it up. As much as I support the small wineries, and I buy way too much wine directly from wineries in Washington, I am not sure I can support this initiative.

W. Blake Gray said...

Anon: Uneducated people are more likely to be teetotalers than educated people. It's a stat. I can dig up the source if you insist.

I'm usually not a fan of legislation by ballot box either; it tends to give us populist laws written by extremists.

In this case, though, the legislature is unlikely ever to make changes because beer distributors spread so much money around to local politicians.

Pass I-1100 and let the legislature address any small holes in it. But wait for the state house to act on its own and you elevate the power of lobbyists.

It's your vote. Very few new laws create a perfect world. But this one's strengths far outweigh its weaknesses. And the status quo, for you, should be unacceptable.

mark said...

The commercials being run against 1100 are enough to make me vote yes on 1100 on principle alone. The scare tactics employed by the no on 1100 are nutty. To think we need state government to police our morality or our children is ludicrous.

Vancouver WA

B.D. said...

Losses to: Lymwood - $500k, Edmonds - $500k, Mill Creek - $232k, Brier - $82k, Woodways - $15k, Snohomish County - $1.6m from either 1100 or 1105. Which programs are you going to cut? Or are you going to put the screws to the legislature to come up with a reasoned privatization plan during the next session?

I don't care for the scare tactics of the commercials either. What I do care about are the lack of zoning laws - which Californians enjoy - and the loss of revenue to governments at this time of economic crunch. I would much rather see an approach to privatization that has a 2 - 3 year time line and makes clear where the revenue will be made up. To do otherwise is irresponsible.

See my own critique of both bills: http://bdsworld.blogspot.com/2010/10/1100-and-1105.html

harry said...

I find it hard to believe that counties are going to lose that much money, B.D. A state-run system has to have substantial costs of its own. And at the end of the day, the legislature can adjust taxation as it sees fit.

Anonymous said...

Seems to me that making alcohol cheaper with less regulation would cause more societal problems than the current system in place. If one can buy a bottle of whiskey for 5 dollars at COSTCO instead of 10, is it not logical to think that eventually one will drink twice as much? As you aptly alluded to, it usually comes down to the money...

Anonymous said...

As they say, the devil is in the details. Once you have had a chance to read the entire bill and all that it implies, this truly is a bill that is for the benefit of Costco. This is the lawsuit against the state that was unsuccessful, so now they are trying it through the initiative process.

The profits, as opposed to the revenues, do go to the various counties and cities as a component of their budgets. If that is removed, it is highly unlikely that the legislature could enact tax increases to cover these costs, especially in light of another initiative that will require a two thirds vote on any tax increase.

1100 removes a level playing field that has allowed small wineries and breweries to flourish. Current law prevents the ability of large companies to outspend small companies to gain market share unfairly. The wine industry in Washington now has nearly 700 wineries. The economic value to the state is 4.7 Billion dollars. Under this initiative, those protections are removed. There is a whole section of law that would be repealed, and would probably have a deleterious effect on the industry.

Centralized warehousing is something that Costco has wanted for a long time. Allowing Safeway, Walmart and the like to stock wine by the case instead of the bottle will cut down on consumer choice. Shelf space is a finite resource. Some of that will be taken up by distilled spirits. Bottle facings will now have to be three bottles wide by four bottles deep, instead of the current one bottle wide by four bottles deep. Again, limiting consumer choice.

Deep Throat said "Follow the money". See who is funding this initiative and paying for the ads. They are not doing this for the benefit of small business and jobs.

The devil is in the details.

W. Blake Gray said...

Why are you anonymous? Are you ashamed of your opinion?

I think you work for a beer wholesaler and are trying to distort the issue. Prove otherwise.

NickinSeattle said...

Bottom line Prohibition ended quite some time ago, and Washington State Govt has no business in the liquor trade, or any other trade for that matter. When we travel to states that allow adults to purchase alcohol where they shop we don't go on a bender because it costs less than have of what Washington State extorts from those that consume.
As to lost revenues. The Legislature needs to be reined in and start listening to the will of the people, instead of the in your face we'll take what we want when we want and you'll follow our orders approach.

B.D. said...
This comment has been removed by the author.
B.D. said...

The state system's costs are not out of line with the private sector's costs. As with the private sector those costs are entirely covered in the mark up added on by the state. As I noted in my blog posting that mark up includes in it further taxation that funds cities and counties and that's where the losses will occur.

A)Is it responsible for the citizens to pass a bill cutting the taxes without also noting where the replacement funding is cut from? Well, it is if you're Republican. B)Do you honestly expect the legislature which couldn't raise taxes against big oil this year to replace those losses in revenue? C)What happens if the Eyeman initiative passes requiring a 2/3 majority to raise taxes - how is the legislature going to replace that funding?

I philosophically agree that the government shouldn't be in the liquor business. I just think it's irresponsible to do so without creating the regulation and taxation system that replaces the old one at the same time. And no one addresses the fact that California enjoys zoning laws while the proposed initiative 1100 does not.

W. Blake Gray said...

B.D.: If you philosophically agree, take the step. How else is it going to happen?

B.D. said...

Blake, I think it should happen either through an initiative that clearly outlines the replacement revenue stream or through the legislature designing a bill that would do that. With more Republicans coming to the legislature it's more likely to happen in the next session and then I'll be happy to establish what I think a specialty liquor store should be like in the area.

W. Blake Gray said...

B.D.: I don't think an initiative should designate a revenue stream. Think about what you're saying: that the initiative should include taxes or fees on something that's not being taxed now. Do you want to start deciding taxation by ballot box?

This initiative is a crucial, big, philosophical step toward dismantling the system now in place. If you really think new Republican legislators are going to turn their back on donations from beer distributors ... you know, I was going to write some stinging analogy here, but I think I'll just leave it at that.

Different Nick said...

I've gone on record supporting this 1100 bill and I'll reiterate my support for it now.

It really is a philosophical issue to me. Either the state should be in the liquor business or not. Either the market forces should be allowed to set prices and practices or not.

This is socialism vs. American republicanism (small r). Costco is probably the best thing that ever happened to the state coffers BECAUSE they advocate for these types of market forces and know how to succeed in that environment.

I'm in the wine business and know these issues intimately but have no dog in this fight directly.
http://www.yesto1100.com/

W. Blake Gray said...

If anyone is following the comments, please see my addendum to this excellent, objective breakdown of the bill's impacts:

http://www.wawinereport.com/2010/10/in-crucible-boiling-down-initiatives_15.html