Distilling the truth about privatizing liquor sales

It certainly would be more convenient to buy liquor along with eggs and milk, but is it right for Oregon?

A political group, “Oregonians for Competition,” is working on an initiative to get privatizing liquor sales on the November ballot.

It’s a day Sisters Liquor Store Owner Bob Grooney fears.

“It affects the morale of my employees,” Grooney said Monday. “There’s a lot of uncertainty to where this thing is going to go.”

Despite that uncertainty, there is a recent example to look to — Washington state recently privatized its liquor industry.

It’s something Oregonians for Competition Spokesman Pat McCormick says is due to happen to Oregon.

“This is a Prohibition-era law,” McCormick said. “They (grocers) were hearing regularly from customers for more convenience in the purchase of liquor.”

Grooney prides himself in offering hundreds of types of liquors — many of which are from small, local distillers.

He said large grocers wouldn’t be interested in carrying smaller or more specialized spirits.

“You wouldn’t have nearly the variety that you have now,” he said.

The measure would put the OLCC out of the business, add a 72 percent sales tax on purchases, and only allow qualified retailers — stores larger than 10,000 square feet — to sell spirits.

Grooney said that would shut him down, ending the family business that’s been running for more than 20 years.

“I would love to be able to hand my store over to my grandson, who works here and knows everyone in the community,” Grooney said. “That’s what makes Sisters, Sisters, and I’d like to see that carry on.”

Local distillers also say the convenience will come with a price.

“With the minimum margins that anyone can operate on, we’ve calculated that prices (of spirits) will go up 30 percent,” said Oregon Spirit Distillers Owner Brad Irwin. “I really think that will have negative impact on us.”

Irwin describes the price hike like this: “There will be the wholesale price, which for say, is set by me, then there will be a 71.7 percent tax, then the wholesaler will get it and will mark it up, and then that will get distributed to the grocer and they’ll mark it up.”

Irwin said that’s exactly what happened in Washington state, and he says Oregon initiatives are very similar.

Still, lobbyists for the initiative said more competition could do the opposite.

“When you go away from a completely controlled price structure to a competitive marketplace, people will find a range of prices,” McCormick said. “There’s nothing in what we’re proposing that’s intended to lower or raise prices — it’s only intended to take the state out of the business.”

McCormick also said additional funding will be built into the measure for local public safety programs –and to encourage safe and legal drinking.

Opponents of the initiative also argue grocers would have a tougher time keeping alcohol out of the hands of minors.

It’s a debate riding on a billions of dollars industry — affecting your pocketbook, your selection and your convenience.

McCormick said there are three initiatives on the table that will be reduced down to one in the coming weeks. He said the next step will be gathering the voter signatures to put the measure on the ballot.