KHQ.COM - Initiative 1183, which privatized liquor sales in Washington has been in effect now for a year. But today, the manager of one local store, Good Spirits in the Five Mile area, closed up shop for good.
The store was open for only 8 months and the General Manager told KHQ Monday he is afraid more stores may have to do the same. The owners of Good Spirits felt that the Five Mile area in north Spokane was a good place for a one-stop shop for specialty wines and liquor. One year after the passing of Initiative 1183 and the privatization of liquor sales across the state, the store closed. General Manager Ted Eaton says the store had been losing money and finally they had to make the hard decision to shut their doors, laying off four employees. Eaton says it's not an equal playing field for small business owners. Large retail stores like Costco and Total Wine and Beer are able to offset the 17 percent state tax by raising prices on other items in their store, allowing them to charge less for liquor. Small locally owned stores are unable to do that because their focus and sales are all liquor related. Also, distributors are able to sell directly to restaurants and bars at a lower price causing smaller stores to lose out on even more business. With the state collecting significantly more revenue from liquor sales than anticipated, Ted wants Washington to help small business owners compete with the large corporations. The price of liquor is set to slowly decline as the 10 percent distributor fee will be reduced to 5 percent next June and competition is expected to also drive down prices. Whether or not this will help small business remains to be seen. Washington now has more than 1,400 retailers selling liquor. Compare that to 329 state run stores. Total sales are up an average of 2.7 million liters a month, compared to 2.5 million before privatization. State economists predict that taxes and fees will generate $425 million dollars for this fiscal year, which wraps up at the end of June. That compares with $309 million the liquor business generated for state and local governments in 2011.