Checking in on Washington State 5 Years After Privatization


Washington State privatized its liquor system in 2011 (the law took effect in 2012), and The Spokesman-Review recently published a piece investigating how the Evergreen State's booze market is faring 5 years later. According to the article, alcohol sales are up--likely due to much larger selection and more outlets selling booze--while prices have risen slightly as well. The price increase, however, may be due in part to Washington still having the highest distilled spirits tax in the entire country (according to the Tax Foundation). From the Spokesman-Review:

"Cross-border sales are one lasting effect of the privatization of liquor sales in Washington. More than six years after voters passed Initiative 1183, forcing the government to relinquish its Prohibition-era monopoly on sales of spirits, many continue to feel pinched by higher prices – and some still look for deals out of state.

Yet sales in Washington have been climbing, too. As backers of the initiative promised – notably Costco, which shelled out a record-breaking $22 million in support of the measure – there are more places than ever to buy liquor in the Evergreen State.

Privatization has enabled many distributors and retailers, such as California-based BevMo! and Maryland-based Total Wine & More, to capture significant shares of the Washington market, and top brands can be found on the shelves at any grocery store...

In fiscal 2017, Washington’s liquor taxes and fees added up to $31.48 per gallon, down from a peak of $35.22 per gallon three years prior, according to the Tax Foundation. In a distant second place this year was Oregon, where the liquor market is still tightly controlled, with a tax rate of $22.78 per gallon. Idaho, which also maintains a government monopoly, taxed $10.98 per gallon.

The high tax rate has resulted in a windfall for Washington’s government..."

Read the whole article here.