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UW Election Eye 2012

Campaign 2012 through the eyes of UW faculty and students

June 6, 2012 at 11:30 AM

I-1183: from ballot to bottle service

Washingtonians began June with a new opportunity to purchase hard liquor in non–state retail outlets. The UW Election Eye team was out that first Friday looking for clues as to what the new drinking landscape looked like from the bar stool perspective.

SEATTLE — Last week marked the end of a 78-year old system and a multi-year battle to get liquor on the shelves of private retailers. During the 2010 election cycle, two initiatives were

"Dark and Stormy" craft cocktail prepared at Hazelwood in Ballard. (Photo by Dan Thornton / UW Election Eye)

put forth to the people — I-1100 and I-1105 — both aiming to get liquor out of the state-run stores and both failed. Last year, only one initiative was on the ballot concerning liquor distribution and it was backed by more than $20 million from Costco. And it passed.

Since last November, the state, retailers and new distributors have been moving quickly to transition from the 78-year old system. Friday, June 1st marked the first day that state liquor stores were out and private distributors and retailers were in.

Costco was not the only store to provide liquor to its customers on June 1. From Safeway to Fred Meyer, from QFC to Bartell Drugs, retailers made room for the new products on their shelves. The impacts of the new distribution system reach beyond the newly stocked shelves of grocers and the empty ones of the now defunct state stores. A privatized distribution system means new prices (for now, higher prices), new products and potentially new menus at local bars.

At Hazlewood, a craft cocktail bar in Ballard, the staff on hand on Friday had mixed feelings about the change. Tending the bar during the first happy hour of the new era, Hazelwood co-owner Keith Bartoloni described the new system as a challenge for bar owners and managers to be more resourceful. After the two main distributors, Southern Spirits and Young’s Market, bar owners are still waiting to see what products get picked up and where they will need to go to stock their bars. “Craft cocktailers will need to do a little more shopping.”

But the new system also means a wider selection. Keith is looking forward to changing out some of his stock, “We’ve only had access to about 10% of what is out there,” and new distributors will open the doors to a myriad of products.

For now, Hazlewood is well stocked. As self-described “hoarding,” they built up their stores with $15,000 – $20,000 worth of booze. After the state made it legal to store liquor off-site in December, many bars took the opportunity to ensure they had enough product during the I-1183 transition. Bartoloni’s partner Drew Church, heard of one bar who stocked 90 cases of liquor off-site which was only recently made legal by the state for bars and restaurants. This extra stock will allow Bartoloni and Church to adopt a wait and see approach to the new distribution opportunities that emerge. One of the challenges of the new law is that where once all liquor sales were distributed to bars and restaurants by the state, now wholesale purchasers like Hazelwood have to find individual distributors to fulfill their orders. In a bar like Hazelwood where they carry many specialty spirits, this might take some time to figure out.

Hazelwood's Keith Bartoloni prepares a specialty cocktail on June 1, 2012. But the new landscape will also make it possible for craft cocktail establishments to find unique products to serve their customers that the state might have been unwilling to stock before. This is especially exciting for Bartoloni who is looking forward to serving more local boutique distilled spirits. (Photo by Dan Thornton / UW Election Eye).

For now, having extra bottles in stock will most likely prove a smart strategy. There is not only uncertainty about where bar owners will find their usual stock, but also in pricing.

With the state out of the selling side of the equation, taxes still remain, but now distributors need to make their margins. Once customers add in the 20.5% spirits sales tax and a $3.7708/liter spirits liter tax, most products have a higher price tag. For bartenders and managers who need to start stocking their bars through private distributors,  their customers will begin to see higher prices on the menu.

Church foresees some normalization in prices as competition become a factor. For now, Hazlewood is happy to have stock on hand to offer their customers pre-I-1183 prices.

 

Comments | More in State | Topics: Costco, Hazlewood, I-1183

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