Oregon: Guest opinion – Why liquor privatization is wrong for Oregon

Hood River Distillers CEO Ron Dodge shares his view on a move towards private spirits sales in Oregon

Source: Portland Business Journal

Mar 25, 2016

If you stopped by a Fred Meyer store in Vancouver, Wash., last weekend looking for your favorite liquor, you might be surprised by what’s missing.

The most popular brands with Oregonians could not be found in the Washington store. Hood River Distillers Vodka and Fleischman’s Royal Vodka, Oregon’s No. 1 and No. 2 brands in 2015, weren’t on the shelf. Popular brands that did make it cost almost 30 percent more.

In 2011, grocers got their way with a ballot measure that privatized Washington’s liquor sales. The measure has been good for big corporate profits and bad for consumers and small business.

In Oregon, big-box grocery stores and global liquor brands tried to privatize our liquor system in 2014 and failed. They’re back again now, wanting to gather signatures to place a measure on the November ballot. As Washington’s experience has shown, the large corporate grocery takeover of liquor sales would be bad for Oregonians.

There’s a reason that big-box grocers spend big money to pass privatization measures. It’s an investment with a healthy return.

In Washington, one big-box grocer spent more than $40 million over two years to get liquor into its stores. In Oregon, one of the country’s largest grocery chains has already contributed $2 million and the measure hasn’t even qualified for the ballot yet.

Yet, their profits would come at the expense of small producers, independent retailers, and state and local governments. It would wash away $200 million a year in liquor revenues that support Oregon’s K-12 schools, police services and mental health care.

In addition, national corporate brands would push out small Northwest craft distillers as higher-volume suppliers buy their way onto grocery shelves. Hood River Distillers is an 82-year-old company headquartered in Hood River, and it makes Oregon’s top-selling liquor, Hood River Distillers Vodka. After Washington’s measure was implemented, Hood River Distillers’ sales in the state dropped by 29 percent and led to $5.8 million in lost revenue.

Consumers would be hit if big-box grocers get their way. While prices have been relatively stable in Oregon, Washington liquor prices rose by an average of 15.5 percent for 750 ml size bottles between 2012 and 2014, according to a study published in the Oxford University Press. Those prices have helped drive Washingtonians into Oregon to buy at our border liquor stores.

At the Fred Meyer store in Vancouver, four of Oregon’s top 10 selling brands were missing. Jack Daniel’s Old No. 7, Oregon’s eighth most popular brand, did make it on the shelf at $29.36, 28 percent more than Oregon’s price of $22.95.

Finally, our current liquor sales system promotes economic growth and Oregonians like it.

Since the start of the Great Recession, employment in Oregon’s “alcohol cluster” (the beer, wine and spirits industry) has jumped by 5,200 jobs, or 46 percent. That’s more than four times faster than the comparable U.S. “alcohol cluster.” While many Oregon exports are falling, Oregon’s alcohol exports reached a new record in 2015, according to the State of Oregon’s Office of Economic Analysis.

Clearly, Oregon’s liquor sales system benefits taxpayers, the economy and small business – and Oregonians know it. In a November poll of 500 likely Oregon voters, about two-thirds said they agreed with this statement: “Oregon’s current system for liquor sales works just fine. We don’t need to fix something that’s not broken.”

Let’s protect taxpayers and small business and stop the Oregon liquor market takeover.