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

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:

• The complete 60-page text of the Initiative 1183 (or the 32-page easy-to-read, long-to-load version)
• The current law
• The Washington State Liquor Control Board’s (WSLCB) statement and transition overview

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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