Ever since Costco and its executives first started making noise about deregulating and privatizing our state’s liquor control system, it’s been apparent that their driving motivation for pushing privatization is because they want our state’s liquor stores’ business for themselves — not because they think “getting the state out of the liquor business” (which is a favorite catchphrase of theirs) is good public policy.
Costco and other alcohol profiteers spent more than $6 million last year trying to dupe voters into deregulating liquor, after having failed to persuade the Legislature to do so. Voters rejected both Costco’s I-1100 and a competing measure, I-1105, by significant margins. But despite being told no, Costco was undeterred. It came right back this year with I-1183. And when it became clear that I-1183 – like I-1100 and I-1105 before it – would have vigorous opposition, Costco opened its checkbook and started writing check after check.
In the end, Costco spent around $19 million, setting a new record for spending on a statewide ballot measure. (Previously, the dishonor had belonged to the American Beverage Association, a corporate front for Coca-Cola, Pepsi, and the Dr Pepper Snapple Group, which spent $16 million selling I-1107 in 2010).
$19 million may sound like a lot of money, and it is. $19 million is more than our Washington State Parks system gets from the state’s general fund. $19 million could completely offset Governor Chris Gregoire’s proposed cuts to adult hospice care and early childhood education ($10.5 million and $6.1 million, respectively).
But $19 million turns out not to be that much when compared to the profits that Costco stands to make. The Seattle Times has a story today about Costco’s I-1183 spending, which was twice what its chief financial officer had been planning for. Despite going over-budget with I-1183, Costco still stands to profit handsomely from its passage… as long as the measure isn’t overturned in court.
Spirits sales account for about 2 percent of Costco’s overall sales in states where it sells liquor currently, [Costco Chief Financial Officer Richard] Galanti said.
That could easily top $81 million a year in Washington, where Costco has 27 warehouses that tend to do better than the companywide average of $150 million in annual sales.
Do the math, and it’s easy to see why Costco was willing to shell out so much for I-1183. $81 million over ten years works out to $810 million. Over twenty years, it works out to $1.6 billion. Costco’s executives no doubt figure that if they succeed in dismantling Washington’s liquor control system, it will stay dismantled, allowing them to profit indefinitely from their one-time investment.
Despite what Costco claimed in its advertising, I-1183 was never about convenience, choice, or more revenue for public services. It was (and is) about greed. The public safety and public health ramifications of increased availability of alcohol are not problems that Costco cares about. When its executives talk and think about laws regarding the sale of alcohol in Washington, they see dollar signs.