Washington State Privatizes Liquor Sales

Voters in Washington state approved a Costco Wholesale Corp.-backed ballot measure that will allow grocery stores and warehouse clubs to sell liquor beginning June 1.

ISSAQUAH, Wash. — Voters in Washington state approved a Costco Wholesale Corp. [3]-backed ballot measure that will allow grocery stores and warehouse clubs to sell liquor beginning June 1, 2012.

Costco reportedly spent a record $22 million, mostly on advertising, as part of its voter campaign.

"This privatizes a part of government that should have been private a long time ago," said Jan Teague, president and chief executive officer of the Washington Retail Association, Olympia. "It's good for retailers and good for consumers since there is competition and we'll likely see prices drop."

To sell liquor, stores will have to meet certain requirements, including operating in enclosed spaces of 10,000 square feet or more within a single structure. The initiative will also require a store to demonstrate it can effectively prevent sales of alcohol to minors; give local communities input before a license can be issued; and ban liquor sales at gas stations and small convenience stores.

Retail stores that are approved for licenses will pay 17% of their gross revenues from liquor sales to the state, while distributors will pay 10% for the first two years and 5% thereafter, the measure's sponsors have said.