Oregon: Court approves ballot title for liquor privatization

Source: Statesman Journal

KRISTENA HANSEN

March 24, 2016

Oregonians are one step closer to deciding this fall whether they want to buy liquor at the same places they already can grab a bottle of wine or six-pack of beer.

The state Supreme Court on Thursday approved the title language of a November ballot proposal that would allow grocery stores to stock their shelves with distilled liquor across Oregon, where there are currently more places to buy legal recreational marijuana than a bottle of Jack Daniels.

Grocers behind the measure now have the go-ahead to begin gathering 88,100-plus required signatures by July, the final step to put Initiative 71, dubbed Oregonians for Competition, before voters this fall.

It’s certainly not the first fight grocers have waged against Oregon’s Prohibition-era monopoly – among about 18 states that still control distribution and sales through a limited number of state-run liquor stores – but grocers say they’re confident more than ever this year.

“We believe Oregonians are ready to end the state’s monopoly on liquor sales and allow Oregon consumers to buy liquor at qualified grocery and retail stores, just like consumers do in most other states,” Lynn Gust, a co-sponsor of the measure and retired president of Portland-based Fred Meyer Stores, said in a statement. “The initiative will allow the state to focus more on alcohol law enforcement, which is what Oregon voters originally intended the (Oregon Liquor Control Commission) to do.”

But the clash between grocers concerned with their bottom lines and small distilleries worried about shelf space at big grocery chains that often arises from privatization efforts is playing out again in Oregon.

Oregonians Against the Takeover – a coalition formed by the Associated Liquor Stores of Oregon, Oregon Beer & Wine Distributors Association and East Bend Liquor, among a handful of others – argues liquor costs would soar as they have in Washington state, which privatized in 2011 and now has prices that are among the highest in the country.

It also says the measure would create a gaping hole in revenue for many public services.

“Oregonians will have a clear choice this November: A yes vote will blow a hole in state, local and mental health budgets, while corporate grocers make big profits,” Ryan Frank, a coalition spokesman, said in a statement Thursday. “A no vote will preserve a system that Oregonians believe works and has allowed Oregon’s craft alcohol industry to thrive.”

The opponents’ argument about revenue is true, but to a degree.

Liquor sales are big money for Oregon. In the last 2013-15 budget cycle, net sales from Oregon’s 200-plus state-run liquor stores topped $1 billion for the first time, compared with the $35.3 million brought in by beer and wine taxes, according to the liquor control commission.

Handing things over to the free market means the state either gives up that revenue entirely or it comes up with a way to preserve it through a new tax.

Unlike past efforts, grocers decided this year to leave that tax issue up to the Legislature, which floated an idea last month but ultimately tabled it until next year. If the measure passes in November, lawmakers would have a six-month legislative session to hammer out an alternative before July 2017, when privatization would go into effect.