Lower prices for wine? Don't drink to that.
The Washington Legislature seems likely to pass a bill that would make significant changes in the state’s archaic wine and beer laws. But lawmakers have stopped short of proposals by some retailers that would give Washington consumers access to a wider range of wines at potentially lower prices.
Earlier this month, the House overwhelmingly passed HB 2040, which would ease restrictions on cross-ownership between producers, distributors, and retailers that date from the 1930s. It also would relax some pricing rules and let producers and distributors provide retailers with branded promotional products such as corkscrews. The Senate version, SB 5834, has cleared a committee and appears on route to passage.
Big-box retailers such as Costco failed to convince lawmakers to allow volume discounting by producers and distributors. The retailers say they could offer consumers lower prices if they could negotiate discounts for big orders, as they do with other types of products. The state Liquor Control Board warns, however, that this would dangerously increase the public’s consumption of wine and beer.
A separate bill pushed by San Francisco-based online retailer Wine.com to allow out-of-state retailers to sell wine to Washington consumers died. That bill would have licensed and taxed out-of-state retailers, which currently sell online to Washington consumers without the state collecting any tax revenue. The Liquor Control Board supported the bill, but the Washington Beer & Wine Wholesalers Association opposed it.
The current legislation results from years of wrangling between wineries, retailers, distributors, and state regulators. Last year, Costco lost a long antitrust legal battle to roll back the state’s wine and beer regulation system, calling it anticompetitive. Many of Washington’s wineries argue that less regulation would lead to more wine sales. But the Liquor Control Board and distributors contend that anything that lowers price would increase consumption.
The wholesalers are fighting to retain their legally protected middleman-distribution role. They worry about further erosion of the state’s three-tiered distribution system, which was undercut in 2006 when lawmakers permitted both in-state and out-of-state wineries to sell directly to retailers and consumers.
There’s also conflict between a new group representing smaller wineries, Family Wineries of Washington State, and the Washington Wine Institute, the state’s main wine lobby anchored by giant Ste. Michelle Wine Estates. The family wineries group, led by Paul Beveridge, proprietor of Wilridge Winery in Seattle, seeks more sweeping deregulation than the Wine Institute favors.
Even though the current bill doesn’t give all the interest groups everything they want, the relaxation of the cross-ownership rules has strong support. In recent years, these rules got in the way of many budding Washington winemakers, who had to win special exemptions to make wine if they also owned an interest in a business that served alcohol or if they wanted to open a tasting room.
It’s expected that the big-box retailers and other interest groups will be back before the Legislature next year seeking additional changes.












Comments:
Posted Wed, Mar 25, 3:23 p.m. inappropriate
I don't buy the idea that lower prices lead to more consumption. My own personal experience, and that of people I know, is that customers with ample money to spend buy higher quality beverages, not more of a cheaper brand. I know that if I'm thirsty, and the wallet is winning its war with the palate, I'm likely to eschew the Pike Ale in favor of Foster's or Rainier Ale. But if I'm flush with cash, I don't swill down a case of Pike just because I can afford to buy it.
Posted Thu, Mar 26, 8:26 a.m. inappropriate
Research has shown that higher alcohol prices reduce consumption, especially among teenagers and young adults. If you google 'alcohol prices and consumption' you'll get plenty of links to back this up. Here is one: http://pubs.niaaa.nih.gov/publications/arh26-1/22-34.pdf.
Is it really THAT important that our state changes regulations to make alcohol more accessible? Are adults finding it difficult to buy alcohol? I understand that our local wine industry has growth potential and that's important in these difficult economic times, but at what price? Many of the current regulations help prevent underage drinking and adult over-consumption.
Posted Mon, Jun 15, 2:40 p.m. inappropriate
How about they raise taxes to maintain higher prices instead of creating an inefficient industry of government sanctioned middlemen whose job it is to make it harder to buy and sell alcohol.
Government should use policy to shape economic landscape to achieve our goals, not force further inefficiencies on the perpetually imperfect market. The current system is heavy-handed and doesn't serve government, producers, retailers or consumers as well as it could. Eliminate the bizarre layers of bureaucracy, and hodgepodge of antiquated temperance laws (e.g. state-run liquor stores, no liquor sales on Sunday, and the weird mandatory rail around restaurants that serve alcohol to keep children at bay), add back a revenue replacing sin tax, with an extra chunk for increased alcohol education and treatment so that people with drinking problems can get help.
Everyone will win but the wholesalers with their state-sponsored monopoly on distribution. IMHO