Reports: Wash. liquor prices appear to rise after privatization

Privatization of sales took effect last week

NEW YORK — Some people in Washington state may be having "buyer's remorse" over the privatization of liquor sales there, which took effect last week, according to published reports.

The Seattle Times reported Wednesday that — according to an "informal, unscientific" reader survey — liquor prices for 13-of-the-20 most popular brands had increased, and 90-of-170 prices reported were higher than in the old state-owned liquor stores, compared with 82 that were lower. The newspaper reported that the findings were "challenging the basic idea that competition leads to lower prices."

In November, voters in Washington passed a referendum, Initiative 1183, to convert Washington from a "control state" — in which liquor sales were restricted to state-owned stores — to a "license state," in which any retailer with a minimum amount of floor space could obtain a license to sell liquor. The referendum received heavy sponsorship from Costco Wholesale and other retailers, and the Seattle Times reported that more than 1,600 retailers, including supermarkets and retail pharmacies, had applied for licenses. Most states are license states, but a handful — such as Utah and Pennsylvania — remain control states.

One possible explanation for the price increase, according to the newspaper, was the 17% fee on retailers and the 10% fee on distributors, the latter of which will decrease to 5% after two years. Taxes — including a 20.5% spirits sales tax and a $3.77 liter tax — that had been included on price tags at the liquor stores but not at private retailers, were another possible factor.

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