Washington State like Utah imposed controls on liquor shortly after prohibition was lifted with the passage of the Twenty-first Amendment to the United States Constitution on December 5th, 1933. By its terms, each state was allowed to set its own laws for the control and distribution of alcohol. At that time, liquor control was presented as promotion of public virtue.
Initiative 1183 in Washington State will be on the ballot this year to strip the retail side of liquor sales away from the states grip. Washingtonians tried to pass a similar initiative last year which failed largely because it was rushed from the gathering of petition signatures and drafting, right to the voters without enough vital public input.
Washingtonians have since went back to the drawing board where they resoundingly scratched allowing convenience stores and gas stations to be liquor retailers by imposing a 10,000 square foot space requirement, along with other significant and tightly regulated controls making this initiative stronger than the first. It should be noted that Costco, a large 10,000+ square foot retailer is among the initiatives sponsors.
All this begs me to ask, is it time Utah also gets out of being the distributor and the seller of wine and alcohol? Isn’t it time to wrestle away the states control from an overzealous and ill informed state board? There may have been a time and place for existing regulation controls but the current structure and administration of DABC is broken. I tried to determine what Utah’s profit margin from sales of alcohol is under its control but calls to the DABC were not returned before we went to press> it's interesting to note that the state government of Washington makes a whopping 52% margin on liquor. Clearly, the state's actual reason is likely its monopolistic pricing model.
According to the Departments website, "The purpose of control is to make liquor available to those adults who choose to drink responsibly - but not to promote the sale of liquor. By keeping liquor out of the private marketplace, no economic incentives are created to maximize sales, open more liquor stores or sell to underage persons. Instead, all policy incentives to promote moderation and to enforce existing liquor laws is enhanced."
Along with other controls put in-place by the Utah Senate over the last few years you can understand why the Utah Hospitality Association recently sued the state DABC under the antitrust in Federal Court in June; specifically controls that were introduced in Senate Bill 314 earlier this year to prohibit drink specials and, the current quota system for issuance of liquor licenses which was set to change this past July.
Utah may even suffer a loss of business expansion, read jobs; simply because the state has reached a cap on the number of liquor licenses that were available under the current quota system. Companies in the hospitality industry take careful note of what goes on in our State Senate regarding liquor controls and where they build future stores and restaurants.
