Mr_monopoly Many states have their little quirks when it comes to liquor sales, and Washington has quirks in spades. Washington is one of 18 liquor "control" states, in which the state runs all of the liquor stores. Although I come from Texas, not exactly a home of free market liquor policy, I was still astounded when I first heard about the system in Washington. Here's a rundown of some of the features of this system -

  • All liquor stores are owned by the state, except for some contract liquor stores in areas where the state doesn't want to open stores.
  • Employees at state controlled stores are state employees.
  • Distributors are state controlled.
  • Prices for liquor fixed on both the wholesale and retail end.

While I haven't gone shopping for liquor since I arrived in the state (too much great wine to bother with liquor so quickly), the monopoly in the state seems to have accomplished what monopolies tend to accomplish, which is raise prices. This seems to be partially due to exorbident taxes on liquor sales, but since the prices are set, there really isn't much opportunity for shopping around for a better deal on that bottle of Jack that you want to buy.

Currently there is an initiative on the ballot in Washington to privatize this system. Actually, there are two initiatives, which was a little confusing for this recent transplant at first. Although I am still figuring out the specifics, it seems like the major differences between initiatives 1100 and 1105 are that 1100 dismantles the three-tier system, allowing for direct sales to retailers, and that 1100 maintains the current taxes on liquor, while 1105 repeals them and would call for new taxes to be established.

This is an extremely high level look at this issue, but Sean Sullivan has done a great job of explaining the differences between the two initiatives, as well as Washington's initiative process, on his Washington Wine Report blog. There is also a great document detailing the two initiatives from the Washington Policy Center.

For those of you from Washington, what do you think of the two initiatives on the ballot? Those outside the state, do you live in a "control" state, and what are your thoughts on the system in your state?