May 03 2006
Another win for the People: Costco Wins Case Against The State Liquor Control Board
I missed this when it was handed down, but thought that it was an interesting story to go along with my blog on the Liquor Tax being ruled unconstitutional.
Washington has long had a severe nanny state mentality to Alcohol. We have state run stores for hard liquor and enough restrictions to make you go sober.
Not any more.
Giant retailer Costco filed an Anti Trust suit to force fair trade practices regarding sales, pricing and distribution. For a discount warehouse who normally depends on bulk purchasing and such to keep prices competitive, they were stifled by the states uber-control.
In what amounted to a near prohibition era control of the industry, the state maintained a stranglehold on retailers in an attempt to promote temperance, orderly market conditions and to raise revenue.
Costco wins beer, wine suit - Judge’s ruling could lead to lower prices across state
Costco Wholesale Corp. won a landmark legal battle Friday that could lead to lower beer and wine prices in Washington — and across the nation, if other states use the case’s precedent to knock down their distribution laws.
The Issaquah company brought the case against the Washington State Liquor Control Board because it said Washington’s three-tier system for distributing beer and wine was hurting its ability to do business, in violation of federal antitrust law.
Joining the State in opposing this was the Washington Beer & Wine Wholesalers Association.
The state now, unless they appeal, no longer:
- Force producers and distributors to each mark up their products by 10 percent.
- Ban high-volume discounts to retailers on beer and wine.
- Ban credit sales to retailers.
- Ban central warehousing of beer and wine by retailers.
- Require that beer and wine distributors and producers post and hold prices for a month.
- Require wholesalers to charge uniform prices to all retailers.
- Require wholesalers to charge the same “delivered” price to all retailers, no matter what the actual delivery cost.
Sorry, I thought we lived in a free market. The State will of course maintain its monopoly on hard liquor sales at the State Liquor Stores.
The Seattle PI took The State to task in its Editorial:
Costco Lawsuit: Prohibition over?
The 21st Amendment repealed the 18th’s failed attempt to make the United States dry. But states, including Washington, have dragged Prohibition era remnants into the 21st century.
The state forces distributors and retailers to mark up beer and wine by 10 percent, ban retailers from high-volume discounts, credit purchases and central warehousing and force wholesalers to charge uniform “delivered” prices to all retailers, regardless of the real delivery costs.
The lawsuit against the state Liquor Control Board, brought by Costco Wholesale Corp., will have national implications, as retailers (and consumers) try to weaken the states’ alcohol stranglehold.
Even for those who would support the notion that it’s the state’s obligation to promote temperance, it’s tough to make the argument that the arcane state system is accomplishing that objective. In any event, lowering the cost of top-end wines is hardly going to cast the gutters awash with well-heeled tipplers.
As Pechman wrote, “These restraints must yield to the national goals of a competitive, free-market economy.”
The state should forgo an appeal and adjust to the modern era.
A lovely thought, but no.
State liquor board to appeal ruling that favored Costco
State says judge didn’t weigh societal concerns over consumption of alcohol
Nanny State indeed. Making it more expensive will not prevent its use. Hello? Gas Prices anyone?
The Washington State Liquor Control Board said Wednesday that it intends to appeal a federal judge’s ruling that the state’s three-tier system for distributing beer and wine violates federal anti-trust laws and must be changed.
…
Pechman wrote that there was “little evidence that the restraints are effective in advancing the state’s interests in promoting temperance, ensuring orderly market conditions, or raising revenue.”
Bingo.
Those were the defenses raised by the liquor control board, which tried to use the 21st Amendment to defend the post-Prohibition-era regulations. The 21st Amendment repealed Prohibition in 1933 and gave states the right to control distribution of alcohol within their borders.
But, wrote the judge in her decision: “These restraints must yield to the national goals of a competitive, free-market economy.”
Bingo.
The state is now claiming “the judge’s ruling failed to balance legitimate societal concerns about the negative effect of alcohol consumption with the interests of large corporations that profit from the sale of alcohol.”
The state will seek to stay the judge’s decision, pending review by the U.S. Ninth Circuit Court of Appeals.
Oh well never mind. There is no chance the 9th Circus Circuit Court will let this pass.
The state said it will not seek to overturn other laws, spun off from a prior ruling on Costco’s case, which allowed out-of-state producers to ship directly to in-state retailers - a bypass of distribution middlemen which was already granted to in-state producers.
Nice. Any cronyism here?
All I know is that this State has taken unbelievable steps to regulate the lives of it’s citizen’s. And people are getting fed up with it.
The State’s only defense is that most people are so apathetic they don’t care.
Previous articles on Washington State’s Stupidity.
- The people win one: Judge rules against tax hikes
- VIaduct can be repaired for less then a billion
- Ding Dong, the Tax is Dead.
- SayWa (…ht the hell?) to the new State Slogan
- Danger and denial of care for elderly residents.
Linked to Stop The ACLU
30 Responses to “Another win for the People: Costco Wins Case Against The State Liquor Control Board”
I say first that I am a liberal Democrat, former chairman of a county Dem. party, and active for years as an advocate for the Democratic Party. I am also a resident of Washington State who has, in the past, held a "license" to sell beer and wine. I’m with the ‘Right wing’ on this one…and almost anywhere else the incipid paternalism of Washington State interferes with the consent of adults regarding personal, private, behavior. Atlas Shrugged was not so much a novel, apparently, as it was prophesy.
There is no evidence that Washington suffers more or less negative incidents associated with alcohol consumption than any other state (yes, there are exceptions, but there are always exceptions). The idea that mandating that wine costs say, $13 a bottle instead of $9.99, somehow mitigates problems associated with drinking, is so absurd as to be, well, Washington State.
The ’small’ wineries on the side of the State are clearly protecting provincial interests, and their claims that Costco’s position poses a danger to their own local wineries though true, is intellectually dishonest when backed-up by claims of displaced workers, etc. The small business has the same interests as the big one, the big ones have simply been more successful in the game..but none of the ‘big’ players started out that way.
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