Initiative 1183 – Privatizing the Liquor Industry – Part IV – Licenses & Timeline

December 4, 2011

This is a series, check out Part I, Part II, and Part III if you haven’t seen them yet!

DISCLAIMER:  I am NOT an expert in either law or the liquor industry.  Anything I write here could be inaccurate, especially due to the varied and changing interpretations of the law as it goes into effect. I will try my best to get things right, and make corrections as need-be, but I make no guarantees as to the accuracy of what I write here.

Resources:

Licenses:

Unless noted otherwise, all license fees are charged on a yearly basis.  (These are only the licenses relevant to the changes in 1183.  For a full list, see RCW 66.24)

  • Spirits Distributor — a person/company who “buys spirits from a domestic distiller, manufacturer, supplier, spirits distributor, or spirits importer, or who acquires foreign-produced spirits from a source outside of the United States, for the purpose of reselling the same . . . or who represents such distiller as agent.”
    • Fee = $1320 + 10% of sales revenue for 2012-14 or 5% of sales revenue after 2013.  (If total state tax revenues from spirits distributors are less than $150m by March 31st, 2013, each distributor faces an additional fee based on sales to meet this value owed to the state.)
  • Spirits Importer — a person/company “who buys distilled spirits from a distiller outside the state of Washington and imports such spirits into the state for sale or export.”
    • Fee = $600
  • Representative — a person/company approved by a “holder of a certificate of approval, a licensed beer distributor, a licensed domestic brewer, a licensed beer importer, a licensed microbrewer, a licensed domestic winery, a licensed wine importer, a licensed wine distributor, or by a distiller, manufacturer, importer, or distributor of spirits, or of foreign-produced beer or wine” to “canvass for, solicit, receive, or take orders for the purchase or sale of liquor”
    • Fee = $25
  • Craft Distiller — A distiller who produces sixty thousand gallons of spirits or less.  At least half of the raw materials used must be grown in Washington.  A craft distillery can sell up to 2 liters a day per person of its own product.
    • Fee = $100
  • Certificate of Approval — a document permitting a winery/distillery to sell to distributors, importers, or retailers.  A direct shipment endorsement is available, which allows the winery/distillery to act as distributor for its product.
    • Fee = Not Stated.
  • Spirits Retailer –A business of  at least 10,000 square feet of retail space within a single structure (including storerooms and other interior auxiliary areas).  Licensees must manage inventory, train employees, supervise employees, and provide measures to prevent theft of liquor by underage or inebriated persons.
    • Fee = $166
  • Grocery Store — A business with a minimum of $3000 of “food products for human consumption” (not including soda or alcohol of any form) may sell wine, beer, or “strong beer” at retail for consumption off-premises.  (Note: this is the loophole for mini-marts.  Any mini-mart that already has a grocery store license that allows them to sell wine or beer will be “deemed to be premises ‘now licensed’ under RCW 66.24.010(9)(a)”.)
    • Fee = $150
  • Wine retailer reseller endorsement — Applies to grocery store licenses, and allows them to sell wine (at retail)  to retailers licensed to sell wine for on-premise consumption, for resale at their licensed premises according to the terms of the license. Single sales are limited to 24 liters, unless the buyer is the manager of a contract-operated liquor store.
    • Fee = $166

Timeline:

  • December 8th, 2011 -
    • The new law goes into effect.  Any suits against potentially illegal legislation in the text of 1183 must be brought to court by this date – I don’t know if they have to be settled or not, as my knowledge of this process is fuzzy.  Some concerns that may be brought up: the 3-tier system is partially legislated by the federal government, and interstate shipping is fully legislated by the federal government, so the state may not have power to change these.
    • WSLCB starts drafting up the new system.
    •   Craft distilleries can start selling directly to restaurants and bars (on-premise retailers).
  • January 1, 2012 -
    • WSLCB must process all applications for spirits distributors.
  • January 2012 -
    • WSLCB will start disposing of property and assets.
    • Some stores could be closed as early as Jan. 1st, though it seems unlikely.
  • March 1st, 2012 -
    • Licensed spirits distributors may start selling in Washington.
  • April 1st, 2012 -
    • WSLCB must process all applications for spirits retailers.
  • June 1st, 2012 -
    • License retailers may start selling in Washington.
    • All state liquor stores must be closed, and liquor inventory must be either sold or returned to the manufacturer.
  • June 1st, 2013 -
    • All WSLCB assets must be sold (liquor stores, warehouses, furnishings, etc).  Department of Revenue takes over any unsold assets.

Next Up:

State & Contract Liquor Store Transition

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