Sunday, July 18, 2010

Spirits Wars

Liquor privatization seems to be the rage these days. Here in Washington we have not one but two industry driven initiatives to do end the state's monopoly on hard spirits. Now I see that Virginia's governor is proposing very same idea in my former home state. In both states privatizing proponents point to lower prices, greater variety and more convenience. All of which can be problematic and should be fully examined and understood before deciding to privatize.

The difference between Virginia and Washington is that the Washington Constitution provides for citizen initiative. Virginia's does not. A very effective industry in provides the necessary signatures for any cause with money to qualify an initiative in Washington. So Costco and others put the two proposals on November's ballot. In Virginia, the a Republican governor must must convince a Democratic senate. He seems to be offering some pretty shaky numbers, according to the WP story.

The story does a good job of looking beyond the governor's numbers to identify shortcomings in the analyses offered by the governor. In the end, for this governor, I don't think the loss of state revenue is a problem. His mission is to shrink government. Less revenue means less government and more private profit. That works for a Republican.

But it may not work for Virginia. Not where liquor is involved. Virginia is a state where liquor-by-the-drink at bars was illegal until the late 60's. Before 1972 you purchased liquor at a state store where a badge-wearing clerk would pick your order, ring it up and affix one or two labels to the bottle before handing over to you. The stores were institutional and bare. All of this was done to convince Virginians in 1933 to allow liquor sales, according to one of my professors. A strong religious sentiment still supported the prohibition while well-to-elites favored their spirits. So they came up with a restrictive convoluted scheme that and promised to prohibit bars and saloons forever.

In the end, forever lasted less than four decades. Four more decades have passed, which is a Virginia time scale for fundamental changes, so maybe it's time to rethink the state's role and investment in liquor sales. I'd pay close attention to those revenue and cost numbers, though.

Here in Washington I'm sure that I will see and hear all sorts of numbers as the retailers, distributors and unions try to convince me to vote one way or another on one or the other initiative. Maybe I'll figure it out.



Anonymous Anonymous said...

If Washington both sells and collects the tax on ALL the liquor sold in the state, therefore getting both the profit and the tax on every bottle sold, how much better can it get? I even think that alot of drugs should be decriminalized, and I even think the state should keep the sales. The employees really know their stuff.

7:52 PM  

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