The Puget Sound Business Journal has an online poll: "Two Washington initiatives to allow liquor sales in grocery stores: How will you vote?"
Posted by Stefan Sharkansky at September 06, 2010 04:59 PM | Email ThisFollow the money.
The poll is showing that people need to be educated. Voting yes on both will be a disaster, since the state will get to decide the rules.
Posted by: janet s on September 6, 2010 09:07 PMThe other stuff will pass. Washingtonians aren't children that need a nanny. They'll join other states where the sky hasn't fallen.
Posted by: Matty on September 7, 2010 09:31 AMPot will be made legal some day, and having the state system of alcohol distribution in-place will hasten that legalization process because it will provide an immediately available marketing distribution system for marijuana.
No on both I-1100 and I-1105!
Posted by: Politically Incorrect on September 7, 2010 12:07 PMPretty soon unions will be hiding because the mere mention of union will recall stagnation and corruption instantly in the mind of the average voter. The rhetoric about protecting workers rights is early 20th century and far outdated for the average 21st century privately employed knowledge worker. It's ironic that unions donate so much money to government. Because this is the same government that has put in place such a labyrinthine web of worker protections that companies can scarcely get anything done, much less fire or harm their workers in any way.
Posted by: Jeff B. on September 7, 2010 12:27 PMI like firefighters - they're there when you're house is on fire, which seems like a necessary service - but they won't be there after their budget gets cut because cities and counties no longer have the money raised by the current liquor system. 1100 and 1105 will hurt local budgets a whole lot more than it hurt unions, and that hits me where I live. I don't want to cut the city police budget right as more drunk drivers hit the streets.
No on both.
Posted by: Lisa on September 7, 2010 03:39 PMReality -- the "loss" of state and local revenue is a canard. There is no "loss" of revenue. The liquor board has been distributing a lot of false information about an alleged "loss" to city budgets to scare people. The only thing that is "lost" is the Legislature's ability to keep pretending that part of the tax on liquor is a not a tax but a "profit".
See the next post
Posted by: Stefan Sharkansky on September 7, 2010 04:31 PMOf course, there is also a large group of 1100 supporters who take the exact opposite tact and say 1105 gives a blank check to the legislature to actually increase the taxes from liquor sales. It's kind of funny how opponents for the same initiative use two completely opposite arguments in their opposition....but then again, that is politics.
Posted by: Doug on September 7, 2010 08:53 PMVote yes 1100, no 1105.
Watch the money. The distributors and unions want either a no vote or a yes on 1105. Have a clue - neither is in the taxpayer interest.
Posted by: janet s on September 7, 2010 09:55 PMThe question comes down to whether you want the Retailers to have complete POWER over distributors and suppliers (1100) or whether you want the Distributors to have a check on the Retailer's power over the suppliers (1105).
Posted by: Doug on September 8, 2010 06:43 PMDistributors were basically an invention of prohibition and it's repeal; an additional layer taking profit irrelevant in today's world.
Vote no on 1105 and yes on 1100.
Having private enterprise making a profit on liquor is far preferable to the State of Washington making a profit and then wasting it on who knows what......
Posted by: Hank on September 8, 2010 07:35 PMTrue story... first week of August we stop by Walmart to get an ice chest for camping. Middle of summer and Walmart, after running two of our local sport stores out of town, stocked only 1 brand of ice chest and only 1 size --- we ended up having to buy two of them to fit our stuff because it was so small.
This is what is happening folks... Yes, they have decent prices, but they are destroying selection and running suppliers out of business because of their ruthless demands on them, and it will happen with the booze as well, we'll still get a cheap product from someone, just will be what they choose for us to drink.
Posted by: Doug on September 8, 2010 08:46 PMCostco had told us that we had to sell to them 'exclusively' (truthfully, they had a requirement that we do not sell to Walmart and one other store, I forgot the name, if we wanted to sell there.
Safeway had for a time requirements that we fill their store name product which they then turned around and undercut our brand name.
Walmart, well, they're just Walmart. Besides specific package size requirements - and for everyone's info, those requirements were to make a much smaller volume package that looked like it was the same size so that they could put a little bit lower price on it to make it appear to be a bargain when it in fact was a scam - also have requirements to fill their brand, as well as now they are venturing into regulatory requirements completely vertically down the supply chain.
You know how bad it is when government starts regulating - well now it's beginning to be Walmart as well.
Anyhow, the point is that the big retailers have successfully been able to form monopolistic powers at the retail level as a group. They use those powers to undercut supplier pricing to a point that suppliers have to sell most of the time at or below operational costs just to make do. It is obvious that this could be good for prices, but extremely bad for suppliers.
When you go to those stores just keep an eye out for the massive increase in store brand items. Like Clarence's Bell, each time those increase it represents some supplier somewhere that lost their business that was taken over by the monopolistic conglomerate that the large stores are becoming.
Posted by: Doug on September 9, 2010 11:08 PMAnd you still haven't named your product...
Posted by: Stefan Sharkansky on September 10, 2010 10:55 AMI call BS on the claim that "... suppliers have to sell most of the time at or below operational costs just to make do." You can't "make do" by operating at a loss, its unsustainable. If that were truly the case the suppliers would go out of business and the retailers they served would be harmed as well.
I've lived plenty of places that had nowhere near the level of regulation that Washington State does on Alcohol sales, and we were all better off for it. That Washington State is involved in the retail sale of liquor is a ridiculous, morality based anachronism left over from the days when Al Capone was walking the streets of Chicago. It's also an unnecessary layer of government bureaucracy and as we've seen with the sweet-heart appointments to the liquor control board, is also ripe for corruption. Privatization is long overdue here. Yes on 1100, No on 1105.
" If that were truly the case the suppliers would go out of business and the retailers they served would be harmed as well."
Agree on the first part, disagree on the second. The large retailers don't care when the suppliers go out of business. Other suppliers take their spot, many times it's the big guys, Pepsi and Coca-Cola, General Mills, etc. just getting bigger. Then the retailers just force more to go out of business.
Agree on the first part, it's much like the airlines industry. When you are a supplier you have huge capital invested, equipment, land, etc. You can hang on for a period of time selling below cost and try to survive (think of the economics of airlines' price wars) for a period of time.
Farmers are a great example of that, however, farmers also have a huge advantage over other businesses with favorable bankruptcy protection and favorable govt. backed mortgage rates. Even so, when you combine bankruptcy rates and farm foreclosure rates, you end up with those particular suppliers, going out of business at a rate that shows a 30% or greater turnover every 10 years.
Sometimes the suppliers sell out to bigger suppliers, sometimes not. However, in all cases they hold on as long as possible, selling below cost to do so, and it is that market dynamic the big stores take advantage of...
If a retailer can choose between 10 suppliers for a particular product and 5 of those suppliers are financially healthy and 3 of them are so underwater that they will do anything to try to survive, those big retailers play those 3 on each other until they get the best deal for the retailer.
Current practice then results in 2 of those 3 not having a market, the one who sold, sold below cost, and the retailer making a deal with 1 or 2 of the healthy suppliers to carry their products in exchange for them to bottle or package their store brand at a cheap price. This results in a two-tier pricing scheme, where the healthy companies' products are priced at 'Y' dollars, the store brand is priced at 'Y-20%' and the company going out of business at 'Y-10%'. Of course the retailer is tripling their money on the chump company, making minor profit on their own store brand and selling at a slower rate the leading brand.
It happens all the time, all product lines. There is a retailer monopoly that has only been checked by a few things - Pepsi-Cola buying Frito Lay had to be the biggest. It showed that the larger number of brand SKUs your distribution system has, then the less power the retailer has to force you to give incentives for buying their product.
Posted by: Doug on September 11, 2010 09:55 AM