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Last call: Era ends as Valley's liquor stores go private, new competition begins
Customers were steady at North Bend's Liquor Store No. 179 as the clock ticked down to closing time Thursday, May 31. The shelves and stockroom, though tidy, seemed eerily empty.
Tonight marks the end of Washington's 78-year state liquor monopoly, and it was a bittersweet moment for North Bend staff like Cheryl McGee and Shannon Joyce, with 14 years of experience in the liquor business between them.
"There's a whole future ahead," McGee replies when she's asked by a customer what she'll do now. "Unemployment first."
McGee is among the thousands of Washingtonians whose fate changes today, as the liquor industry switches from a state enterprise to a private one under the terms of Initiative 1183, approved by voters last fall.
North Bend was one of the last 35 state outlets to stay open until the final moment.
“This is their last day of business. They will close tonight,” Liquor Board spokesman Mikhail Carpenter said Thursday.
Before they could shut down, every one of the state’s 300-odd stores had to be inventoried and audited. If new owners didn’t purchase the state’s old inventory, it got shipped back to the state. Stores were closed in phases because, Carpenter says, there’s only so much manpower.
“There are a lot of different pieces in play,” he said.
While the state is now out of the picture at Mount Si Plaza, liquor sales will continue in the former state store under new owners. The state sold that store’s license in an auction, Thursday, May 24, after a prior bidder backed out.
Diwag Suneel and Anar Ersel of Renton bid $235,000 to claim the right to sell liquor there. In the last few days, they have been preparing for the handover, and intend to keep some of the former employees.
“They’d like to see us keep our clientele,” Jayne, a store manager, told the Record. The new owners, she said, intend to offer a wider selection of products unavailable at supermarkets.
The new owners must secure a lease with the landlord, or may re-sell their license or request an alternative location in a one-mile radius.
Meanwhile, both grocery stores in town, QFC and Safeway, intend to sell liquor, as do other grocers in the Valley. Twelve doors down from the North Bend liquor store, between the bread aisle and the deli, cabinets at the North Bend Safeway were draped, already partially stocked with rum, tequila, gin, brandy and whisky. Both the North Bend QFC and Safeway were set to serve liquor customers on Friday, June 1.
I-1183 allowed retailers of big enough square footage, 10,000 square feet or more, to sell liquor. The new rules mean that the number of sales points in Washington jumps five-fold on Friday, from around 300 to about 1,500.
Meanwhile, Washington’s old liquor distribution system is being scrapped. The state’s warehouse and contracted trucking companies will be replaced by private industry. Distributing companies under the new law pay multi-million-dollar fees for the right to haul strong spirits.
Brian Smith, another spokesman for the Washington Liquor Control Board, said the state expects to make an additional $215 to 250 million in liquor-based revenues over five years.
State liquor taxes already in place—a 20.5 percent sales tax and a $3.70 per liter tax—remain. New fees include a 1 percent distribution fee and a 17 percent fee.
State distributors, liquor suppliers who will move booze now that the state is out of the business— are also on the hook for $150 million in required license fees.
The human cost includes the roughly 1,200 state employees losing their jobs. Bidders on the state’s liquor store licenses were offered a discount on their bidder’s premiums if they kept employees.
Lori Laughren, an employee at the North Bend store, had some hard decision making to do on Wednesday. With the new bidders on board, Laughren was among the employees who had a day to decide whether to stay, in familiar surroundings but part of a whole new business, or go on unemployment.
She admitted she had a hard time facing the looming change.
“I don’t want to deal with being on unemployment or being unemployed,” she said.
For Laughren, as for others, the transition has been a time of uncertainty. She and fellow staff frequently met customers who didn’t understand what was happening.
“We’re still getting people who think, ‘You’re just going to be competing with the grocery store,’” she said.
Laughren said her state job was never cushy. She makes around $12 an hour.
“Everybody thought we made so much money: ‘Oh, those state employees!’” she said. Many worked for state benefits, now vanished.
The state liquor board will continue to exist, focusing on enforcement and education. But while the number of liquor purveyors in the state is rising five-fold, no new money is being set aside for enforcement measures, Carpenter said.The liquor board did turn down a Seattle-led petition to extend sales hours, sticking to the current 6 a.m. to 2 a.m. rule.
Smith told the Record that the state managed an orderly transition.
“Did this work out for everyone? No,” he said. Initiative 1183 affected an entire industry in Washington, and its new rules satisfy some of those involved, but not all.
“Many of them didn’t like how it turned out for them “ Smith said. “We can only implement it.”
For state liquor workers whose stores were bought, it’s a disorienting transition.
“One day, they’ll be a state employee,” Carpenter said. “The next, they’ll be in private hands. I’m sure it’s going to be amazing for them.”
In Fall City, Tom Bergstrom closed his doors for an extended inventorying session Thursday. Operator of the Hayditter’s contract store, Bergstom will weather the transition, reopening as the Snoqualmie Valley Liquor Company.
The one-man shop has operated in Fall City for 21 years.
“It’s been very difficult,” Bergstrom said of the transition. He found a partner to come through at the last minute, providing funds to buy the inventory and license.
Now, with the state out of the game, Bergstrom’s business will buy liquor through its competitors, the major distributors.
“They’ve pretty much got us,” Bergstrom said. He expects costs to rise as a result of the new playing field—“Some of the stuff they’re selling us costs more than when the state sold it, with tax”—but Bergstrom hopes to be able to join with other independents in a cooperative, buying liquor in bulk.
Customers have been weighing in, many vocally unhappy about the change. Bergstom also knows he has a lot of support from the Fall City community. But his clientele, he says, “can only handle the prices so far...We’ve got a lot of stuff to figure out.”
For about 20 years, the Pozzi Brothers’ white trucks made the liquor delivery run to the liquor stores in North Bend and Fall City.
Lately, the Kent-based hauler brought upwards of 400 cases a week to North Bend, Fall City and the Snoqualmie Casino, hauling it from the state’s Seattle warehouse. That history ended last week, when Pozzi’s and three other haulers’ contracts ended. Distribution companies will now carry liquor with their own private fleets.
For owner Tom Pozzi, the change means downsizing his business, and letting 10 good drivers go.
“I don’t think it’s an easy change,” he said. By Pozzi’s calculation, the state moved 20,000 cases a day, five days a week, by its haulers.
“Now, it’s going to be an all new way,” he said. “It’ll get done. For me, it’s disappointing because we’ve delivered it for 60 years.”
• You can follow official information on the liquor transition at the state website, http://liq.wa.gov/.