Policy Brief

Introduction

In November the people of Washington will vote on Initiatives 1100 and 1105. There are important differences between the two, but both measures would end the state’s prohibition-era monopoly on the sale of hard liquor. Washington Policy Center has long recommended ending the state’s liquor business and refocusing efforts on enforcement and public education.

Washington is one of 18 states which operate an official monopoly over sales of hard liquor. Washingtonians last considered privatizing liquor sales in 1972, when they voted on Initiative 261. That measure was defeated.

The official ballot measure summary for Initiative 1100 reads:

“This measure would direct the liquor control board to close all state liquor stores; terminate contracts with private stores selling liquor; and authorize the state to issue licenses that allow spirits (hard liquor) to be sold, distributed, and imported by private parties. It would repeal uniform pricing and certain other requirements governing business operations for distributors and producers of beer and wine. Stores that held contracts to sell spirits could convert to liquor retailer licenses.”

The official ballot measure summary for Initiative 1105 reads:

“This measure would direct the liquor control board to close all state liquor stores and to license qualified private parties as spirits (hard liquor) retailers or distributors. It would require licensees to pay the state a percentage of their first five years of gross spirits sales; repeal certain taxes on retail spirits sales; direct the board to recommend to the legislature a tax to be paid by spirits distributors; and revise other laws concerning spirits.”

The major difference between the two measures is their treatment of how liquor would be distributed and taxed. These differences will be discussed in a later section. Both initiatives would effectively end the state’s 77-year old monopoly on liquor sales.

Key Findings

1. Both I-1100 and I-1105 would effectively end the state’s 77-year old monopoly on liquor sales.
2. Research indicates that rates of underage drinking and underage binge drinking are virtually identical in license and control states.
3. Evidence suggests that control of alcohol markets does not imply control of alcohol consumption.
4. New revenue received by the state and local governments in the form of higher B&O taxes would offset some of the revenue loss presented by the OFM’s fiscal note estimates for I-1100 and I-1105.
5. If voters approve both initiatives a court ruling, legislative action, or some combination of the two will resolve the differences between the two measures.
6. Ending WA’s liquor monopoly would alleviate the state from the expense of running a business.
7. I-1100 offers a better solution to ending the state’s antiquated liquor monopoly while allowing the Liquor Control Board to focus solely on its enforcement and public education responsibilities.

Read the full Policy Brief here.

A summary Policy Note is available here.