03 June 2012

Sunday Morning Whiskey Run

For the first time since before Prohibition, it is legal in Washington state to purchase a bottle of liquor on Sunday. Not only have the blue laws passed into history, the state liquor stores were closed permanently on 31 May 2012. Since Prohibition, Washington had limited liquor sales to state-run and contract liquor stores. The state managed distribution and set prices. In 2011, voters passed Initiative 1183, ending the old system. I-1183 was authored and heavily financed by Costco and to a lesser extent by Trader Joe's.

The effects of I-1183 have revived the debates from last fall. Consumers rushed to grocery stores Friday morning to buy liquor with their eggs and milk, the news media covered the shopping spree, and the shock of new prices--mostly higher, some vastly so--have stimulated conversation. Before Prohibition, access to alcohol was limited by a variety of measures in states and municipalities. Drug stores were a principal outlet in many locales, for spirits have been medicine since they were first discovered in the ancient human past. There's now something poetic and rooted in history that even in Washington state, I can walk into Walgreens at 6:00am on a  Sunday morning to buy a bottle of Jack Daniels.

Dry Fly Distilling, Washington state's first post-Prohibition distillery, has more than doubled the retail outlets stocking its product in its home state. They have labored hard the past half-year stepping up production in preparation. Project V Single Silo Vodka made from the wheat on a single eastern Washington family farm is now available in Spokane for the first time. That increase in quality product availability should be a principle consequence of free markets. But, I-1183 offered something somewhat different from a true free market, something far more in line with the traditions of American capitalism.

Unfortunately, but predictably, news coverage of the changes resemble press releases from retailers more than any sort of investigative journalism. Prices that would have shamed gangsters during Prohibition are visible in plain sight on store shelves, but almost entirely absent from newspapers.

I-1183 is a mixture of long deferred blessings and unmitigated curses, some of which are covered in the news, and more of which are found in the comments.

An Everett, Washington news story offers several errors beginning with a lead sentence that reveals the authors do not understand the term "blue laws." "A Spirited Start to Liquor Sales" 2 June 2012, HeraldNet.

Never pour the glass that full
One of this article's howlers: "Reasons for the prices lie in the rules of Initiative 1183." Several retailers and fellow customers were repeating that mantra as I shopped yesterday. "Taxes raised the prices," is another version. But, that story falls short of explaining why a fifth of Blanton's was $55 including taxes last week, and now sells for $65 before the 20.5% Liquor Sales Tax and the $2.83 Liter Tax ($3.77 per liter). The highest round numbers explaining the Initiative noted a 27% tax, and that somehow accounts for a 68% price increase? I don't think so.

Many articles banter about the figures that prices are 10-30% higher, while Costco claims that its prices are 5% lower. The goat cheese that I buy at Costco costs almost exactly what I pay at Fred Meyer with the slight difference that I buy six times the quantity at Costco for that price. When a Costco price is 5% below a norm, the membership fee is not really worth the cost. But, the old state liquor store prices (long lamented as higher than prices in many other states) are no longer the norm. Much higher prices are. For the limited selection available at Costco, they will have the best price.

A Reuters story, "Liquor Sticker Shock Stirs Up Washington State Drinkers," repeats this strange and inaccurate 10-30% figure. Much of the rest of the article, however, shows more evidence of historical perspective and journalistic inquiry than is available elsewhere.

The most heavily circulated article seems to be "Retailers, Customers Welcome Wash Booze Sales," by Shannon Dininny and Elaine Thompson (link is to Bloomberg Businessweek). I read this article in the Seattle Times, and then ran into dozens more looking for something with a little better balanced coverage. There's not much wrong with what the article says, but most of the story is absent.

The Seattle Times offers a feeble effort to measure the price differences in "Help Us Measure How Liquor Prices Have Changed." The newspaper offers a list of old state prices and a field where readers can fill in new prices. But, their selection is limited to top-selling products, which quite naturally are the ones most likely to go down in price. One reader pointed out the foolishness. Many others listed their prices not in the database, but in the comments. There, one finds documentation of the 30-75% price increases on whiskey manufactured outside Lynchburg, Tennessee.

Suffering a late-season flu this past week, I was not among the customers who rushed the stores on Friday. Feeling better, a bit, on Saturday, I had an urge to explore the new world of liquor retail sales. I was delightfully surprised to find Blanton's Bourbon on the shelf at the Fred Meyer three blocks from my home. This small store does not stock non-sparkling wine that exceeds $26 per bottle in price, and only exceeded $25 when they recently added King Estate 2010 Pinot Noir. Previously, L'Ecole No. 41 2008 Merlot was the most expensive bottle. The price of Blanton's, however, assures me that I will not find it there in September. I've bought the Pinot and several bottles of the Merlot. I will not be buying the Blanton's unless I find it on close-out discount that brings it down to the old liquor store prices. I'll be going to Post Falls, Idaho to buy Kentucky bourbon.

It was Blanton's that turned me on to bourbon when I was in graduate school, transforming my drinking pattern from youthful drunkenness to adult cultivation of taste. It was a dinner at an academic conference at L'Ecole that turned me on to Washington Merlot. It's nice to see both at Freddies. The difference in price structure is another story. That's where the journalists should be looking. So far, they do not seem to see past the press releases put out by industry propagandists (I am not referring to the manufacturing industry).

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