The passage of Initiative 1183 by a wide margin (nearly 60% for) will bring significant changes for the sale of wine and spirits in Washington State (beer remains unchanged). Here is a summary of some of the changes.

First, there is a shift in the public perception of the role of the state in the sale of liquor. There is clearly a mandate for privatization. The voters did not buy the "Protect our Communities" (actually "Protect our Jobs") scare that worked for the opponents last year. Also there was not the confusion of two initiative on the ballot. While Costco's bankrolling of the Yes on 1183 campaign was a major factor, this outcome is largely the result of the legislature's abdication of its responsibilty in dealing with liquor privatization. Session after session, privatization bills were sent to die in committee.

Wineries, especially smaller ones, are nervous about the impact of 1183. One concern is less shelf space for wine as supermarkets start stocking spirits. The other issue is volume discounting which would give larger wineries more clout. My feeling is that wineries that produce quality wines will do just fine, even though they may need to do more creative marketing.

The privatization timeline is for the Washington State Liquor Control Board to continue selling at state stores through the holidays, then start drawing down inventory at the begining of the year. Wholesaling of spirits commences March 1, 2012 (which means restaurants can start buying from distributors instead of the WSLCB). In the meantime, the state will auction off its stores to private investors. Retail sales of spirits is to commence June 1.

The passage of 1183 also puts the seven remaining state store systems on the line as privatization targets, with Oregon and Idaho as the most likely ones. In Utah, the Salt Lake Tribune has reported on calls for privatization. The growing sentiment, in the West at least, is that liquor sales is not a proper function of state government.

Another interesting aspect of Initiative 1183 is that it is largely a victory for supermarkets and big box stores (Costco, WalMart). In Colorado and Kansas, stand-alone package stores are fighting efforts by grocery stores and convenience stores to sell wine and strong beer (and spirits in Kansas). Passage of laws governing the sale of liquor has always been a battleground for various competing business interests.

For more information about the repercussions from 1183, go to Sean Sullivan's (www.wawinereport.com) and Paul Gregutt's (www.paulgregutt.com).