I‑1183, if implemented, could generate $81 million plus in annual sales for Costco

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.