State studies liquor sales
Published 12:41 pm Friday, November 15, 2013
The Oregon Liquor Control Commission has established a committee to study ways the state could make liquor sales easier for consumers while still maintaining state control.
“We’ve been hearing from our customers that they would like to have better access,” said Christie Scott, spokeswoman for the OLCC. “And that’s part of our mission, to balance the public safety part of it (with) the customer needs and stay current to modern times.
“Does that mean something like every grocery store can sell distilled spirits?” Or, she said, is it something in between that and what is in place now?
“With increased access can come increased crime,” she said. “What IS controlled access? What IS a good plan?”
Oregon is one of 17 states, along with several counties in Maryland, that control some portion of liquor distribution and sales.
The OLCC has exclusive rights to sell distilled spirits, which it distributes from Portland. Spirits are sold in liquor stores operated by state-contracted agents.
Discussions about privatizing liquor sales in Oregon grew after Washington residents voted in 2011 to end state control and let the private sector distribute and sell booze.
The OLCC’s Retail Innovations Group — which includes liquor store owners, large and small retailers, local government representatives and beer, wine and distilled spirits makers — began a series of six meetings Oct. 4 to examine the current alcohol system and consider ways to modernize it.
By the last scheduled meeting in mid-December, the group plans to have a final draft for the Legislature.
“We’re looking for ideas from the members on different models the OLCC might consider going forward,” Scott said.
The goal is to preserve the selection of spirits available in the state, improve access and look for opportunities to increase the revenue that goes back to the state, cities and counties, she said. So far, topics of discussion have included assessing liquor prices, adding more stores and allowing grocers to sell distilled spirits, such as whiskey, gin, vodka and similar spirits.
Over the years, the OLCC has created new sales methods, and it has encouraged craft brewing and distilling.
In 2004, three stores in the state, including Ray’s Food Place in Bend, were approved in a pilot project to operate liquor stores within grocery stores.
The OLCC also created two satellite liquor stores, one located in Sunriver, to operate in smaller communities where demand fluctuates, she said. And in March 2012, commissioners approved other rule changes, such as allowing four Oregon liquor stores, including Giorgio’s West Bend Liquor, to also sell beer and wine.
Spike Bement, general manager of Newport Avenue Market, said the Bend store would love to add spirits to the products it sells.
“I think it would make us more of a one-stop shop kind of place,” Bement said.
However, Brad Irwin, head distiller and owner of Oregon Spirit Distillers in Bend, said he favors keeping Oregon’s current system in place.
“I think it works, and most importantly it works not just for me and the OLCC, it works for the citizens of Oregon,” he said.
During the 2011-13 biennium, the OLCC collected about $1 billion in gross revenue, 95 percent of which came from the sale of distilled spirits, according to agency records.
That generated $397 million for the state, cities and counties, Scott said. The city of Bend received more than $2 million, and Deschutes County got about $1.4 million.
When state control over sales and distribution is reduced, Irwin said, the profit will go to corporations instead of back to the state, citing regulatory models in California and Washington. Unlike Oregon, both of those states have sales taxes.
“When we look at Washington, they opened it up and let distributors handle it, and the prices went up 30 percent,” he said. “More importantly, the state was no longer making the profit. … You have to say, ‘Let’s privatize liquor and have a sales tax instead.’”
In California, he said, prices for bottom-shelf liquor are significantly lower than in Oregon, but premium liquors are only about 10-15 percent cheaper.
And while the sale of liquor at grocery and convenient stores could make purchasing spirits more convenient for consumers, he said, it also increases the risk for minors to obtain alcohol.
Irwin said he operates a small business, and the OLCC makes the playing field fair, giving small and large distillers access to the marketplace.
“If we went to more of a California state model, it would be detrimental to my business,” he said. “It would definitely change the way new, small business in Oregon had access to (the market).”