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Oregon liquor commission chairman warns of privatization risks

September 17, 2013

Privatizing liquor sales in Oregon would put a crimp in state revenue and “shut out” a growing craft distillery industry, the chairman of the state liquor agency told a panel of lawmakers Monday.
At the same hearing, a state liquor store owner blamed the Legislature for the outdated and rundown feel of most places where booze is sold in Oregon.

Rob Patridge, only recently appointed chairman of the Oregon Liquor Control Commission, said his agency hasn’t been asked yet to do a thorough economic study of the impact of privatization. But he knows it won’t look good.

Privatized liquor sales in Washington allow consumers to buy in bulk from stores like Costco. If Oregon follows suit, it would hurt state revenue, a liquor official said

“If we have the Washington model come to Oregon, it would certainly hurt revenue long-term for the state,” said Patridge, who is Klamath County district attorney and a former state representative.

The comments came at a joint hearing of the House and Senate business committees, which are considering possible changes to the structure of Oregon liquor sales.

Although no privatization ballot measure has been proposed yet, a lobbyist for Northwest grocers told The Oregonian in July that his organization “is getting very serious about doing something for 2014.”

The OLCC, meanwhile, has been looking for ways to modernize and better reflect changing consumer tastes, Patridge said. The commission recently gave the nod to all liquor stores to begin selling beer and wine alongside spirits. And the agency is experimenting with “store within a store” liquor sales at some grocery outlets.

Interim OLCC director Merle Lindsey said local craft distilleries have become a growth industry and now represent 12 percent of state liquor revenue. That industry would be harmed by a privatization measure, Patridge told the panel.

Local distillers “have basically been shut out of Washington” in the wake of privatized sales there, he said.

Saleem Noorani, who owns liquor stores in Corvallis and Springfield, told lawmakers they need to take another look at the commission rates the state pays to liquor agents. The current commission of 8.8 percent of sales hasn’t changed in 10 years, and is no longer adequate, Noorani said.

“The challenge and dilemma for most agents in moving to better locations, longer hours and remodeling to new modern interiors is revenue,” he said. “Unfortunately, since the Legislature and not the commission set the compensation rate, the agents have not been seen as valuable business partners worth investing in.”

“Sadly,” Noorani said, “the policies of not investing in the infrastructure of the retail side of liquor sales is evident in the condition of the majority of liquor stores.”

Source: The Oregonian

http://www.oregonlive.com/politics/index.ssf/2013/09/want_modernized_liquor_stores.html