A trio of Democrats in the Washington State Legislature have introduced a bill that appears to be designed to strip Costco of the legal right to sell liquor under voter-approved Initiative 1183 when the new state law privatizing liquor sales and distribution is fully implemented in early summer of this year.
On Thursday, State Reps. Sam Hunt (D-22), Sherry Appleton (D-Poulsbo), and John McCoy (D-Tulalip) sponsored House Bill 2426 under the title “Prohibiting the issuance of spirits retail licenses to certain membership organizations.”
What companies would be prohibited from selling liquor under the state’s new privatized system, enacted by voters by nearly an 18-point margin of approval? At this early stage, what constitutes a “membership organization” is not clearly defined in the bill, but there are enough breadcrumbs in the current text to make an educated guess. From HB 2426:
[B]uying in bulk and in supersized packaging, a pattern of activity that is promoted and encouraged by membership organizations, increases abusive consumption. In order to protect the public interest, advance public safety, and prevent abusive consumption of spirits, the Washington state liquor control board is explicitly prohibited from issuing spirits retail licenses to certain membership organizations.
The only way legislators could have been any more coy in painting the target of the bill would have been to define membership organizations to include all places selling a hot dog and soda combo for an absurdly low price.
Costco is the largest membership organization in Washington State that would qualify to sell liquor under 1183. Costco also provided a record-breaking amount of money to the campaign to pass the initiative; wine and spirits wholesalers, alcohol distributors, and an assortment of public and private-sector unions combined to finance the unsuccessful campaign to defeat the measure.
The tell-tale ignorance of market economics that leads to the bill’s inference that efficient purchasing amounts to “abusive consumption” and the drafters’ confusion about the incentives motivating consumers provide clues to HB 2426’s point of inspiration. (Individual buyers are encouraged by price – not the opportunity for wanton binge behavior – to buy in bulk.)
Are those ideologically-loaded hacks at Costco’s business model the latest visible edge of an axe the losing side of the 1183 debate is swinging with vehement spite and malicious intent? Not so surprising, the money trails leading to the campaign against 1183 and the campaign funds of HB 2426’s sponsors share a large list of common contributors. According to reports filed with the State Public Disclosure Commission for election cycles between 2000 and 2010, many of the contributors to Protect Our Communities – the group who fought a losing battle to defeat 1183 – also show up on PDC records for Hunt, McCoy, and Appleton.
During last year’s battle over 1183, Protect Our Communities received $820,000 from the Washington Beer and Wine Wholesalers to try and stop liquor privatization and the disruption of a comfortable single-buyer marketplace. Since 2000, McCoy has received $1,700 from the WBWW; Hunt took $2,470 from the group.
The United Food and Commercial Workers union gave $619,000 to the No on 1183 campaign, and in the last 10 years the UFCW has given $2,475 to Hunt and $1,300 to McCoy.
Although a junior investor in the effort to defeat 1183, the Teamsters – who, along with the UFCW, also filed a lawsuit last December challenging 1183’s constitutionality – have also been generous in supporting the legislators pushing HB 2426 forward. Since 2000, Teamsters organizations have dropped $2,975 into McCoy’s hands, gave $5,475 to Hunt, and Appleton raked in $6,500 of Teamsters money.
Last year, the State Office of Financial Management estimated conservatively that 1183 would create at least $400 million in additional revenue for state and local governments during the first six years of implementation.