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Distributors and teamsters oppose the Costco Liquor Loophole Bill (HB 1161) in Washington

Source: Gallatin Public Affairs

The House Government and Oversight Committee will hear HB 1161 – The Costco Liquor Loophole Bill – today.

“We find it amazing that Costco and other proponents of I-1183 are attempting to change the wording of their own initiative only months after the law was implemented,” said John Guadnola, executive director of the Association of Washington Spirits & Wine Distributors.

Backers of Initiative 1183 promised voters that privatizing our state’s liquor system would not impact state funding levels from liquor. They said the taxes and fees in the initiative would keep the state whole. To do this 1183 imposes a 17% fee on retailers, and a 10% fee on distributors, and it forces distributors to pay a lump sum of $150 million (less distributor fees already received) for the right to do business in Washington.

“Costco deceived the voters of Washington State when they pushed through Initiative 1183 last year, now they are deceiving Washington Bar and Restaurant owners and our Legislators in HB 1161, a plan designed to benefit their own business interests at the expense of the citizens and small business owners of Washington,” said Rick Hicks President of Joint Council of Teamsters No. 28.

What Costco now aims to do with HB 1161 is to exempt itself from paying the 17% retail fee when selling to bars and restaurants. In addition, Costco is currently in a lawsuit to exempt itself from the 10% distributor fee on spirits sourced directly from manufacturers.

“Costco is trying to have their cake and eat it too,” continued Guadnola. “They want to act like a distributor, but not pay into the system.”

HB 1161 would also strengthen the market position of big box retailers at the expense of smaller retailers. Stores like Costco would have an additional advantage over former state-owned and contract store owners in areas throughout the state where big box stores exist.  As our state sees smaller stores close, consumers will have to rely on big box stores like Costco who carry only a fraction of the products of former state-run stores.