A Little Raskin: Craft Distillers' Private Concerns

I-1183 neutralizes the state's booze biz.

Washington's craft distillers are studiously avoiding taking a stand in the Initiative 1183 fight, citing business-related hazards associated with both positions.

"Most of the small guys, we've tended to stay out of it," says Steven Stone, founder of Sound Spirits in Interbay. "If we come out for it, we've pissed off the only retailers of our products. And if you come out against it, you might upset the public." Stone says that when he criticized an earlier liquor-privatization measure on his Facebook page, he was called a communist.

The distillers' neutral stance also reflects the confusion surrounding the initiative. According to Stone, it's not entirely clear whether craft distillers would sell more or less product if the state got out of the liquor business. The initiative would preserve onsite sales and sampling and allow distillers to sell directly to retailers, creating a new potential stream of revenue. But Stone thinks the initiative could also impede the industry's ability to reach new customers by indirectly limiting selection statewide and artificially inflating prices.

Currently, if a drinker wants to buy a case of spirits, a state-run liquor store will fill the order. But grocery stores are less likely to be so accommodating, Stone says. "Groceries only want to carry the brands that are most popular," Stone says. "PCC and Whole Foods will probably want our stuff, but a new brand that's just getting started, how do they get on the truck?"

The initiative's barring of liquor sales in stores with fewer than 10,000 square feet of retail space might also further homogenize liquor choices. The provision was created to keep gas stations from selling liquor, but also prevents the creation of specialty spirits stores. "I don't like the fact that an average Joe can't open up a store," Stone says, suggesting that stores which devote 99 percent of their shelf space to beer, wine, and spirits should have been exempted from the ban.

Stone warns that the state needs to do more than privatize liquor sales if it wants its craft distillers to have a shot at competing with California. "Our liquor taxes are four times the rate they pay in California, and our sales tax is double," says Stone, who's told his distilling pals they should consider drafting an initiative to slash liquor taxes. Initiative 1183 will slap an additional 20 percent fee on liquor, which Stone strongly suspects "will get passed on to consumers."

Still, Stone thinks nobody really knows what will happen if the initiative passes. "The bottom line is it's extremely complicated for the small guy," he says. "There are good things and bad things for us. Something as complicated as this, it's not all foreseeable."

He adds: "We kind of know the way the system works now, though, so it's hard not to be worried."

hraskin@seattleweekly.com

 
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