Push for privatized liquor could come this session

Push for privatized liquor could come this session

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by Jamie Grey

Bio | Email | Follow: @KTVBJamieGrey

KTVB.COM

Posted on January 10, 2013 at 11:51 PM

Updated Wednesday, Nov 13 at 8:15 AM

BOISE -- Some grocery stores and other groups are gearing up to propose Idaho move away from being a 'control state' to using a privatized liquor model. Washington State just went that direction last summer -- and some grocery stores would like to see that in the Gem State.

As of the first week in the session, no formal bills have come up, but there are certainly rumblings in the statehouse. While they're staying pretty mum for now, the Northwest Grocery Association tells KTVB they support privatization and will have draft legislation at some point.

Right now, Idaho is one of 17 control states, meaning the government is directly involved in the wholesale or retail of liquor. The Idaho State Liquor Division reports there are currently 66 state stores and 98 contract stores that are operated by private sector (primarily in smaller communities).

Some want the current system changed for profit reasons, and others want it changed because of concept and ideals.

"Government shouldn't be in the liquor business. Government shouldn't be in any business," Wayne Hoffman, Idaho Freedom Foundation, said.

State laws call for temperance, but also liquor regulation. Some like Hoffman, say fundamentally those two ideas don't match, and legislators should look at a change.

"The Idaho government talks about temperance, and that's the reason we're told Idaho is in the liquor business," Hoffman said. "But on the other hand, Idaho spends a great deal of time talking about all the money that we get through liquor sales. And increased liquor sales are supposedly better than decreased liquor sales, so there's no temperance in that at all."

Some supporters of the current control system say limiting access through fewer locations and hours that have more rules helps keep high-alcohol content drinks away from kids.

"We're not opposed to alcohol use, but we really want it kept away from kids as much as possible," Cindy Schiller, Community Coalitions of Idaho and Chairperson of Treasure Valley Alcohol and Drug Coalition, said.

Schiller is heavily involved in underage drinking prevention, and she says the more places liquor is sold, the more likely kids are to take it.

"I'm very concerned about them just going in there and grabbing a bottle of liquor. I know that's one of the issues they're having in Washington, and I have great concern about that." Schiller said.

In fact, since Washington State privatized liquor last summer, grocery stores are reporting liquor theft, often by minors. Some grocery stores say they've had to add many security measures to target theft.

"Patron [tequila] is one that, it's a name brand, and kids like to steal it, they can resell it," Paul Kapioski, a Seattle grocery store owner, said.

Idaho State Liquor Division Director Jeff Anderson says Washington was the first control state to change over to privatized sales. He says the state has had a number of issues.

"It's a pretty significant problem in Washington right now," Anderson said. "We can see what's happened. Higher taxes, higher prices, increased outlet density, and potentially greater harm to public health and safety."

Anderson says having a conversation about liquor sales in Idaho is worthwhile, but ultimately believes changing a nearly 80-year-old system would be at the very least difficult and at worst costly. As proof of cost implications to consumers, Anderson says after Washington privatized, liquor sales in Idaho's border towns went up.

"In the near term anyway, it's impossible for prices to go down [in Washington], and we have seen that they have not. They have gone up. Depending on the brand and location, anywhere from 10-40%. And we're also seeing sales life along the Washington border at our stores as a result of that," Anderson said.

As for cost to the state, Anderson says last year the Idaho State Liquor Division's net revenue was $63 million, which goes to cities, counties, general government and education. If liquor was privatized, the director says that could go away, leaving holes in local budgets.

Anderson says he understands a want for a change by grocery stores, but he doesn't think a change will be simple or best. If legislators do vote for a change, Anderson says of course they will make any changes necessary.

"[Grocers] have an interest in capturing some of those sales and making a convenience for their consumers. I understand that. But at the end of the day, what they are interested in is that $63 million and how much of that they can get," Anderson said. "We work within the framework of the law, and if the law is to be changed, then we'll adapt to that."

Beer and wine distributors in the state are also concerned about the idea of privatization, as their lobbyist says there is likely be a push to deregulate beer and wine sales as well, possibly doing away with distributors, which currently act as individual licensed businesses that import beer and wine to then sell to stores, bars and restaurants.

As of yet, no bills have been brought forward. Last year, a north Idaho group proposed a ballot measure to privatize liquor, though it didn't get far enough to go to a public vote. With a new legislature in 2013, it remains unclear what the political climate is, and how much traction a change will have.

"I think a lot of the discussion is because of what happened in Washington State. There are legislators and citizens who are now having a public discussion, an open discussion about whether Idaho, the state government, should be in the liquor business. And that I think is very very healthy," Hoffman said.

The Northwest Grocery Association did not answer specific questions regarding any proposed measures or legislation, but its lobbyist confirms it supports privatization and draft legislation is likely coming.

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