OLYMPIA, Wash. - Costco Wholesale Corp. wants to change the rules in order to allow retailers to buy alcohol in bulk in Washington state, the Wall Street Journal reports. Currently, Washington law prohibits retailers from purchasing liquor directly from manufacturers.
The proposed ballot initiative would privatize alcohol sales and reverse old laws on selling liquor. Washington, along with around 20 other states, has a kind of alcohol monopoly that Costco would like to eliminate. The proposal would give retailers more freedom in how they purchase and sell beer and wine, as well as spirits.
Essentially, Costco seeks to be able to purchase liquor in bulk at a discount and to process those orders through its central warehouses. Now, the retailer has to separately buy wine and beer for each store and pay the same cost as any other retailer.
However, distributors are preparing a counterattack to keep their prominent role as middlemen in the distribution of alcohol. The initiative would also take away "tied house" rules restricting cross-ownership of alcohol producers, distributors and merchants, which have regulated alcohol sales in many states since the end of Prohibition in 1933.
Costco is gathering signatures from customers to get the initiative on the November ballot. The group Modernize Washington is also working to repeal the outdated laws. Other groups supporting the proposal include the Northwest Grocery Association and the Washington Restaurant Association.