Washington State Should Close All State Run Liquor Stores

According to a November 2008 seattlepi.com article the Washington state deficit has grown to as much aas $5.1 billion dollars. Based on this and general common sense I belive Washington State should consider closing all state run liquor stores and leaving sales up to the private sector.

I currently have an email in to the Washington Liquor Control Board to try and get current figures but below is some general information and my basic reasoning as to why this should happen.

According to a 2007 article on Komo news's website there was an experiment run where they let 20 of the state run liquor stores open and sell booze on Sunday's. The thought was it might generate at the high side $10 million in sales but in fact it did over $15 million. That was with just 20 of the then 161 state stores.

Back in a 2002 Puget Sound Business Journal article a state representative from Potlatch suggested the same thing and said there could one time savings of $100 million dollars. Figures back then Washington was one of 14 remaining states still in the business of selling liquor and an estimated 800 employees. That was 7 years ago now and since goverment rarely shrinks you have to assume there are more employees and cost savings to be had.

I was also able to dig up a retail services business plan for 2007-2009 the agency itself points out a few items.

On page (5) of the document under a heading "Why Revenue Is Increasing" the top item is "A monopoly on spirit sales". Odd, I thought monopoly's were BAD.

On page (6) are some items that point out, in my mind, the fact that the private sector with it's currently built in system could manage the process better and actually result in a huge increase in sales, thus more taxes coming in. They point out under the "Challenges to Growth" that they have "supply chain staffing and infrastructure" problems and that "state law forbids" them from doing any sort of advertising. Talk about shooting yourselves in the foot.

The document says they run a $650 million dollar retail and wholesale business. In 2005 they produced $705 million in sales and after expenses returned $263 million to the war chest. That would mean it cost $442 million dollars to run the organization. These are 2005 numbers. So even if we rounded a bit the state could save...what, almost half a billion dollars a year just by shutting down all of that junk and letting the private sector handle all of it?

Why not?

Grocery stores, but chains like Costco, already have the infrastructure and space to handle the sales and distrobution. Not to mention they could actually do some advertising and increase sales.

Sounds like a win win to me for everyone. State gets to cut costs and get ouf the liquor business, and the private sector increases sales thus increasing incoming taxes.

Just a thought...

- Scott