Op-Ed: Costco's I-1183 Hurts Small Business, Not Our Moral Fabric
Seattlest Staffers don't always agree on the big issues. Today, Dikla and Sarah will be offering differing op-eds about I-1183, the initiative that would privatize liquor in Washington State.
I'm not going to sugar coat this: I grew up in California, the state where liquor has been privately sold in grocery stores, corner 7-Elevens and membership megastores everywhere since the beginning of time. No, 10-year-olds are not buying 5-liter bottles of Grey Goose at Costco, nor are they sneaking airline shots of Jack Daniels into their schools in their Hannah Montana lunch boxes -at least, not any more than they are here in the state of Washington, where its so difficult to buy booze. But I still don't think I-1183 is the way to go.
Photo courtesy of OPB.org
So far, the alternative to the situation we're in now has been presented to us in a series of aggressive initiatives put forth by one of the biggest corporations founded right here in the greater Seattle area: Costco. This is the buy-in-bulk superstore's second such attempt, and this time, they've poured a record-breaking $22 million into what amounts to another piece of legislation trying to convince Washington State consumers that bigger, cheaper, and more convenient is better. This line of reasoning is essentially appealing to (what I consider) the most basic human instincts of our generation: laziness!
But what does this initiative really mean for consumers? From the Seattle Times:
Initiative 1183 would still privatize the state's liquor business [as did I-1100 and 1105 last year], but it pencils out better financially for state and local governments. The measure would increase the money that goes to state and local governments from liquor sales. It also would limit spirits sales to existing liquor stores and large retailers [a 10,000 square food minimum space requirement], which the state's budgeting office figures would mean about 1,400 stores selling liquor.
While Costco has tried to work out some of the kinks of last year's initiative (that failed) by addressing the loss of state revenue brought in by state-run liquor stores currently, they have also left out some key issues that they're hoping our highly-astute Seattle voters will ignore. Just as with last year's liquor privatization initiatives, as soon as 1183 appeared on my radar, I began to think, Well, alright. How does this affect beer? It shouldn't come as a surprise that I'm going to take the approach of a craft beer lover, advocate, and protector. If something is going to get in the way of the craft beer industries continued thriving in Washington, I'm going to be on the front line of the NO campaign.
This initiative specifically left out beer. Some advocates say there's a reason behind this: Costco is just taking whatever steps they can to cut out the little guys. It also stands to reason that Costco would avoid the industry that put up a nice chunk of money to fight against them previously. The craft breweries have remained relatively silent on this current initiative, but some of them also realize that if Costco wins this fight, they're next.
In a recent conversation with my buddy Neil Falon, CEO of American Brewing, he made an excellent point: Initiatives are supposed to be brought up to address issues that are politically charged by the people, not by corporations. This initiative was essentially written by Costco, for Costco, funded by millions of Costco dollars; figuring out the problem here is a no-brainer. Costco is great and all, but they're really no different than Walmart or Amazon or any other conglomerate businesses in terms of driving out local and small operations. One of my colleagues here at Seattlest also made a great point the other night: This completely leaves out any room for small, boutique, craft liquor stores (due to the 10,000 square foot minimum requirement). Right now, distilleries have the hardest hill to climb: as it stands, there's a higher profit margin if shops go with the cheaper booze offered by the big name brands. If craft distilleries are to have any sort of fighting chance in this state, a chance that local wine and beer have fought for a good while now, they're never gonna make it if we privatize liquor. They are currently left out of the 1183 equation, which does them no favors in these early growth stages.
The lack of provisions for craft breweries, wineries and distilleries in I-1183 is truly anti-Seattle, in my opinion. Seattle loves craft. Yes, we have "antiquated" laws that most people find silly and stupid, but some of those laws have allowed for craft industries to make huge strides. If this initiative was brought forth by the craft (small) liquor businesses here in Washington, there would be some obvious difference and protections for not jacking up their costs and prices to the point where they will likely become obsolete and be buried even further from the public eye. If Costco squashes those who have only in the last 3 years became legally capable of creating craft liquor, then some of the things we hold dearest about our city will likely get steamrolled over and go the way of the five-liter bottles of mass-produced Skyy Vodka.
Sure, Costco has made a few minor changes that they believe will solve the problems that their two initiatives last year did not, but there are so many holes and unpleasant possibilities with the way the current initiative reads, and the implications are vast. While Costco has made it sound really great by employing alternatives for how the loss in state revenue will be accounted for with taxes placed on the distillers and distributors, they haven't highlighted the loopholes benefiting retailers. Costco and big stores are going to benefit 100% with this deal -- they can go direct and bypass the distributors, who will now lose business but gain a 10% tax to compensate for the state revenue missing with the state-run liquor stores gone. So let's recap: Costco wins, little guys lose.
Yes, we've heard arguments from family-friendly and conservative groups saying that this will lead to greater demoralization of society. We don't buy any of that, so come off it. You're grasping at straws, people, and there's no possible way that argument holds up, what with other states having privatized liquor and even a greater availability to liquor outlets, resulting in only conflicted evidence of whether or not underage drinking increases with deregulation. What we really need to look at is large corporations yet again bringing huge sums of corporate money to the table to pass laws that affect small businesses, small industries, and us, the average Joe. I said it last year, and I'll say it again this year: Yes, we need a better system that takes liquor out of the state's hands, but there's gotta be a better way then letting Costco tell us how to do that.
We've been talking so much about corporate greed and how to keep big business out of legislation, if we let this initiative pass, we can only blame ourselves for helping perpetuate the problem. Come on Seattle, you're better than that. Vote NO on 1183.
