Liquor privatization battle heads to Oregon

December 17, 2013

Big retail stores in Oregon will push to privatize state-controlled liquor sales on the ballot next year, duplicating an effort by retailers in Washington State that led to one of the most expensive political battles in history.

A retail trade group anchored by Fred Meyer and Safeway filed petitions Monday to allow stores larger than 10,000 square feet to sell liquor. A top Fred Meyer official is one of the chief petitioners, the Oregonian reported, offering a hint of the corporate money set to pour into Oregon politics next year.

Oregon is one of just 18 states, mainly in the West and mid-Atlantic, that maintains a monopoly on liquor sales. And it’s been a profitable proposition for Oregon: The state reported selling more than $497 million in distilled spirits in fiscal 2013, generating $115 million for the state general fund and $79 million for cities and counties.

States with state-run liquor monopolies:

Source: National Alcohol Beverage Control Association
Source: National Alcohol Beverage Control Association

The Oregon state legislature has been working on a measure likely to head to the floor when they reconvene in February that would maintain the state monopoly while allowing grocery stores to stock liquor. Retailers, however, aren’t completely sold on that approach.

The initiative looks similar to measures Costco and other mega-retailers backed in Washington in 2010 and 2011. The retailers, mainly led by Seattle-based Costco, spent more than $20 million to pass the 2011 version of the law, while opponents dropped more than $12 million against the law. Combined, the $32 million the two sides spent was more money than had ever been spent on an initiative campaign in state history.

Opponents of the Washington state privatization move complained that the state would be unable to make up that revenue, a concern supporters addressed by raising taxes on alcohol sales. The group that backs the Oregon measure, Oregonians for Competition, said their proposal would maintain state revenues and double fines for selling alcohol to minors, the Oregonian said.

Backers of the Oregon initiative have filed five petitions, all with different language. The group will collect 1,000 signatures for each, before deciding which version to throw their weight behind.

Whichever version they choose is likely to make it onto the ballot next year. Oregon has one of the lower limits for qualifying a voter initiative. Supporters of the measure will have to collect 87,213 signatures to win a spot on the ballot, a number equal to 6 percent of the number of votes cast in the most recent gubernatorial election.

The state has a long history of legislating through ballot measures. Since 2000, 107 initiatives and referenda have qualified for the ballot.

Even before Washington voters moved to privatize liquor sales, backers have been pushing other states to follow suit. Efforts to privatize sales have hit road blocks in legislatures in states like Pennsylvania and Virginia.

Reid Wilson covers state politics and policy for the Washington Post's GovBeat blog. He's a former editor in chief of The Hotline, the premier tip sheet on campaigns and elections, and he's a complete political junkie.
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