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Prohibition Legacy Ends in Washington State

On Friday June 1st, the legacy of prohibition ended in Washington state as that jurisdiction completely privatized its wholesale and liquor businesses, ending decades of \”control\” over the alcohol business. Washington\’s government, like most places in the world, will now become a regulator of the business rather than an active participant. The transformation takes place as a result of the successful Initiative I-1183, which was primarily sponsored by Costco in last November\’s election. Washington consumers can now purchase spirits in private stores (previously only beer and wine were available in the private sector). All state government liquor stores have now been closed permanently along with the state\’s wholesale distribution warehouse. The initiative also placed some new taxes on spirits in Washington which were designed to ensure that the state did not lose revenue after exiting the business (in fact, the transition was not designed to be revenue-neutral and taxes are predicted to increase state liquor revenue by about 50%). The new system is explained well in this post from Seattle\’s Wine World and Spirits: Washington Prohibition is Over. From early news reports, it appears that spirits pricing will vary greatly depending upon place of purchase (see Seattle Times Database for comparisons). Due to the new taxes, non-discounted prices will likely be higher than in state liquor stores (see: Buyer\’s Remorse Over End of State Stores as Liquor Prices Rise). However, as with all products sold in the private sector, consumers will likely be able to get better prices (some lower than in state liquor stores) if they buy products on sale or at a discount outlet such as Costco. Here are a couple of examples from the Seattle Times (The Day Liquor Went Private and Prices Stumped the Public): 1.75 L of vodka at Costco: $29 plus taxes = $41; 750 ml of Jack Daniels at Safeway: $18.99 plus taxes = $25.70. If it proves true that state liquor revenue will jump considerably then that would be good news for the state government. As a comparison, in British Columbia the minimum price for vodka for 1.75 L including taxes would be $55.41 and 750 ml of Jack Daniels sells for $31.99.

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