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Prop 1183 Passage Could Mean Liquor In Harvest Market

Issue yet to be fully fleshed out

By BEN MITCHELL

The Enterprise

Although the passage of Proposition 1183 is definite, how the law will affect Bingen and White Salmon is an ongoing issue that has still yet to be fully fleshed out.

The law, which allows retailers with stores larger than 10,000 square feet to sell liquor, passed statewide on Election Day with 58.75 percent of Washington voting yes. The race was much closer in Klickitat County, with only a slight majority of 51.17 percent voting yes. In Skamania County, 54.37 percent voted for approval.

One person who does not approve of the law is Roger Miller, owner of the state liquor store (affectionately referred to by the state as Washington Liquor Agency #551) and Miller Sports, both of which reside in the same building at 150 Jewett Boulevard in White Salmon. Miller, who has operated the store for 28 years, says that the passage of Prop 1183 means he doesn't know whether or not his store will remain profitable.

"It's going to affect me," said Miller. "There's no way around that."

Unlike state-run liquor stores, the store in White Salmon is operated via a contract with Washington and can continue operating. State-run stores and the distribution center in Seattle must be sold to private owners or will have to close by June 1, 2012, effectively ending a state-held monopoly on liquor that has been around since the end of Prohibition.

Though Miller can stay open, he will have to buy the inventory from the state at cost -- currently valued at around $70,000 -- if he does want to continue.

"I am tentatively going to stay in business," he said.

However, Miller is worried whether liquor will be as profitable as it once was. Washington beer and wine distributors can now get into the liquor game, but have to pay 10 percent of their gross revenues to the state for the next two years. After the two years are up, this rate will drop to five percent. Miller is concerned that this will force distributors to mark up their prices, which will result in more expensive alcohol for him and his customers.

Miller is unsure whether this will actually occur and he's not alone. He recently attended a meeting held with members of the Washington Liquor Control Board and the Department of Revenue to see if he could find some answers. However, they state was equally confused about the new law and was not sure of all the implications the divestment of state-run liquor stores would have.

"Unfortunately, there weren't a lot of answers, because the state has never done this before," he explained. "They just don't know."

The cities of Bingen and White Salmon are also unsure exactly how much this new situation will affect the cities' revenues. However, Bingen City Administrator Jan Brending said that the city will lose approximately $3,600 in liquor taxes, which is what she had allocated for the 2012 budget. White Salmon City Clerk Leanna Johnson estimates the city's loss for 2012 to be $11,200. It is unknown how the cities' liquor profit revenues will be affected, which are seperate from liquor taxes.

All this confusion at the state and local levels may derive from the fact that the state did not propose the initiative -- Costco did. The Issaquah-based retail warehouse chain, one of the largest retailers in the nation, has lobbied for years to privatize liquor in Washington. In its most recent campaign, Costco sunk approximately $22 million into Prop 1183, making it the largest single donor for a voter initiative in state history. Costco got its wish and will be able to start selling hard alcohol on June 1 next year.

In addition to Costco, the law would also allow the White Salmon Hi-School Pharmacy and Harvest Market to sell liquor, since the stores are larger than 10,000 square feet. The two businesses already sell beer and wine, but Paul Doty, manager of Hi-School Pharmacy, says he does not plan on selling liquor at his store.

"I do not have an interest in saturating the area in liquor," he said. Doty explained that he didn't think it would be worth the store's trouble and was also concerned about how it would affect the local liquor store and Miller.

"I would no way, shape, or form want to drive Roger or Mona [Roger's wife] out of here," he firmly stated.

"We're a small community," he added. "We're not interested in stealing business away from each other."

Harvest Market, however, may be interested in selling liquor, but only if customers want it. Jeff O'Neal, president of Harvest Market Stores (which are owned by Thriftway), says that people have already been asking cashiers at the White Salmon store when they will see whiskey, vodka, and other hard alcohol on the shelves.

O'Neal is not exactly ready to go full-bore into the sale of hard liquor and said that he wasn't even sure if Prop 1183 will make alcohol any less expensive.

"I don't envision it being a profit-making item at all," he speculated. "The state of Washington has one of the highest alcohol or 'sin' taxes in the country."

"There's so many pros and cons," O'Neal added. "So we want to look at what customers want."

O'Neal said that Harvest Market will begin soliciting customers from the check stands after the holiday season and will also offer customers to comment on the sale of liquor via the suggestion box near the wine section. The reason the store is conducting these surveys in the winter is because O'Neal wants to make sure that year-round residents are responsible for the majority of the input on this decision.

If the store does decide to sell liquor, it would be only the large, 1.75 liter "handles" of top-selling brands, and would not offer the wider selection of alcohol that is currently available at the liquor store.

"It would be small-scale, convenience based," O'Neal explained. "There would be no pint-sized bottles. It opens up opportunities for theft."

Harvest Market would start setting up the store in April for the sale of liquor, and O'Neal said this may coincide with other plans he has had to renovate the store, including expanding the deli, adding an in-store bakery, and adding cases displaying fresh seafood.

O'Neal mentioned that part of his decision to sell liquor would be based on how it could affect Miller and said that he wants to talk to him about the issues they face. Harvest Market's operation plans to be so limited that O'Neal does not think it would hurt Miller much.

"Is there an opportunity to co-exist?" O'Neal offered. "Absolutely."

Miller also believes that the two can co-exist because he offers a wider selection and can also order special bottles if a customer so desires -- a service Miller doubts Harvest Market would offer.

Still, Miller is unsure whether people will still get their liquor from him. He stated that if the liquor store went, his sports business would go under as well.

"The sporting goods is more of a sideline business," he explained. "The liquor pays the bills. Hopefully, I have enough of a loyal customer base after 28 years of serving the community to stay in business."

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