Costco Steps Up for Liquor Privatization in WA State

Costco is stepping up its support for getting Washington State out of the liquor business. As the Seattle Weekly reports, the retailer plans to have its employees help to gather signatures to get Initiative 1100—which would privatize the state-run liquor retail monopoly—placed on the fall ballot.

Issaquah-based retail giant Costco has been trying for years to change liquor laws in Washington. It sued the state Liquor Control Board to force the state to allow high-volume buyers like itself to get discounts on wholesale beer and wine.

Having lost that effort, Costco has started on a new campaign. The retail giant is throwing its weight behind state ballot initiative 1100–the one that would allow Washingtonians to decide whether the state should relinquish its monopoly on liquor sales altogether.

In fact, starting next Tuesday, company employees will help gather signatures at Costco stores across the state. Kristina Logsdon of the Washington Ballot Initiative Network says she’s heard of small businesses making petitions available at their stores. But she’s never heard of a major company like Costco using its retail outlets and employees to actively gather signatures.

The employees’ time technically counts as an in-kind contribution from Costco to Modernize Washington, the organizing committee behind Initiative 1100. And while Costco is required to report the amount of employee-hours donated, state law doesn’t put a cap on in-kind donations in ballot measure campaigns.

More here from Costco’s press release:

Virtually since its inception, Costco has sought to reform the patchwork of outmoded laws that govern distribution and sale of liquor, wine and beer in the State of Washington. Earlier this year, it briefly appeared that bringing private enterprise and competition to the sale of liquor in Washington might get serious attention in the legislature. It did not. In April and May, various initiatives, none initially sponsored by Costco, were filed.

After careful review of the options, Costco decided to support Initiative 1100 because the Company believes it bests serves the interests of its members (and consumers generally) — providing them greater choices in their purchasing options and allowing them to benefit from efficiencies that the private sector and competition can bring to the sale of liquor, wine and beer.

“We serve our members in many states and around the world by selling them spirits, beer and wine at competitive prices,” said Jim Sinegal, chief executive officer of Costco. “We should be able to do so in Washington State too, and other retailers should be able to similarly serve their customers. We are excited that Washington voters will be able to have a direct voice in determining these important policies.”

As a backdrop to this discussion, last December the Washington State Auditor’s Office released a report finding that the state could increase revenue from liquor sales and distribution by up to $350 million over five years beginning in fiscal year 2012 if it sold the state distribution center and auctioned liquor licenses to private retailers.

ABC privatization is also a hot subject in Virginia right now, which my colleagues featured in this recent video, “Virginia is for Liquor Lovers.” As Virginia Gov. Bob McDonnell suggests in the video, there’s really no justifiable reason for government to be in the business of selling distilled spirits.

Rather, the proper role for government is to serve as the regulator, distributing and enforcing private liquor licenses like they do for beer and wine today. Let the private sector run the business enterprises—after all, business is what businesses do best, right?

Leonard Gilroy is Senior Managing Director of the Pension Integrity Project at Reason Foundation, a nonprofit think tank advancing free minds and free markets. The Pension Integrity Project assists policymakers and other stakeholders in designing, analyzing and implementing public sector pension reforms.

The project aims to promote solvent, sustainable retirement systems that provide retirement security for government workers while reducing taxpayer and pension system exposure to financial risk and reducing long-term costs for employers/taxpayers and employees. The project team provides education, reform policy options, and actuarial analysis for policymakers and stakeholders to help them design reform proposals that are practical and viable.

In 2016 and 2017, Reason's Pension Integrity Project helped design, negotiate and draft pension reforms for the state of Arizona's Public Safety Personnel Retirement System and Corrections Officer Retirement Plan, which both passed with overwhelming bipartisan support in the state legislature and were signed into law by Gov. Doug Ducey.

Gilroy is also the Director of Government Reform at Reason Foundation, researching privatization, public-private partnerships, infrastructure and urban policy issues.

Gilroy has a diversified background in policy research and implementation, with particular emphases on competition, government efficiency, transparency, accountability, and government performance. Gilroy has worked closely with legislators and elected officials in Texas, Arizona, Louisiana, New Jersey, Utah, Virginia, California and several other states and local governments in efforts to design and implement market-based policy approaches, improve government performance, enhance accountability in government programs, and reduce government spending.

In 2010 and 2011, Gilroy served as a gubernatorial appointee to the Arizona Commission on Privatization and Efficiency, and in 2010 he served as an advisor to the New Jersey Privatization Task Force, created by Gov. Chris Christie.

Gilroy is the editor of the widely-read Annual Privatization Report, which examines trends and chronicles the experiences of local, state, and federal governments in bringing competition to public services. Gilroy also edits Reason's Innovators in Action interview series, which profiles public sector innovators in their own words, including former U.S. Transportation Secretary Mary Peters, former Florida Gov. Jeb Bush, former Indiana Gov. Mitch Daniels, former New York City Mayor Rudy Guiliani and more.

Gilroy's articles have been featured in such leading publications as The Wall Street Journal, Los Angeles Times, New York Post, The Weekly Standard, Washington Times, Houston Chronicle, Atlanta Journal-Constitution, Arizona Republic, San Francisco Examiner, San Diego Union-Tribune, Philadelphia Inquirer, Sacramento Bee and The Salt Lake Tribune. He has also appeared on CNN, Fox News Channel, Fox Business, CNBC, National Public Radio and other media outlets.

Prior to joining Reason, Gilroy was a senior planner at a Louisiana-based urban planning consulting firm. He also worked as a research assistant at the Virginia Center for Coal and Energy Research at Virginia Tech. Gilroy earned a B.A. and M.A. in Urban and Regional Planning from Virginia Tech.