Washington State Begins Liquor License Auction

Voters approved an initiative that requires the state to end its control of liquor stores.

March 09, 2012

YAKIMA, Wash. - Yesterday, Washington state started to privatize its liquor business with the beginning of a public, online auction for licenses, the Associated Press reports. In November, voters okayed a proposal pushed by Costco that ended the state€™s control of liquor stores.

The measure allows stores with more than 10,000 square feet to sell liquor, with smaller retailers permitted if no other outlets exist within a certain area. Washington€™s 163 contracted liquor stores retail the right to continue operation. The 167 state run stores will be auctioned off, with winners receiving the exclusive right to operate a liquor store at that location.

"Our customers here in the state of Washington have grown to experience a very diverse portfolio of spirit products, and that portfolio won't be available by the general big-box stores," said Pat McLaughlin, director of business enterprise for the Washington Liquor Control Board. "This is a unique opportunity."

The opening bids for a license started at $1,000. "The reality is that we expect the true market value to be higher than that," said McLaughlin. "The market will take the bid where it belongs."

"The reality is there's a new competitive landscape. The big-box stores are entering a market where they haven't been before," said Steve Schmitt with the National Alcohol Beverage Control Association. "The fact that you're going to have that many more entities involved in the sale of product, I think, would keep the value of (state) stores probably somewhat limited."

Two lawsuits have been filed to reverse the initiative, which takes effect June 1. Close to 20 states retain control over retail or wholesale alcohol.

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