PORTLAND — Savvy shoppers from Washington state regularly flock to Oregon because it lacks a sales tax. Now, anecdotal evidence suggests they are being joined by drinkers searching for cheaper alcohol.
Oregon liquor stores near the state line report an uptick in business from Washington residents who say they’re paying more for spirits, not less, since the privatization of the state-run sales system took effect June 1.
“Oh God, yes. I’ve had a lot of customers coming over from Washington complaining; they are not happy with the prices,” said Sylvia Pike, manager at The Dalles Liquor Store. “They are saying things like: ‘I’m boycotting Washington’ and ‘I’m not buying my booze there anymore.’”
Washington voters approved Initiative 1183 last fall, taking the state out of the liquor business for the first time since Prohibition. The measure allows stores larger than 10,000 square feet and smaller stores in some areas to sell liquor.
Supporters touted the measure as a free-market reform that would give consumers more choices and lower prices. Those in favor included warehouse giant Costco Wholesale Corp., one of many big-box stores that can negotiate volume discounts for some products or sell their own labels more cheaply.
However, the initiative also imposed an additional 10 percent distributor fee and 17 percent retail fee on spirits to reimburse the state for millions of dollars in lost revenue. The result was higher prices for consumers at many retail outlets.
Oregon law allows the sale of packaged hard liquor only at stores run by state-contracted agents who are compensated based on their sales. The profits are divided by the state, cities and counties. Oregon’s prices, consistent across the state, were already a little cheaper than in Washington.
Agents from border stores in Astoria, Hermiston, Milton-Freewater, Portland, Rainier and The Dalles said Washington residents have always been regular customers, but there have been more of them, and many new faces, since the initiative took effect.
“We got hit pretty hard this weekend,” said owner-agent Trudi Seadorf of The Dalles Liquor Store. “In a good way. I’m not complaining one bit.”
Christie Scott, a spokeswoman for the Oregon Liquor Control Commission, said most stores submit sales figures at the end of the month, so it’s too soon to say if the anecdotal reports accurately reflect a surge in sales. Scott said the agency analyzed the possibility of higher Washington prices before the initiative took effect. The study showed that Oregon’s 17 border stores could see a $3.6 million to $7 million boost in revenue over a two-year period.
Traci Brumbles, owner-agent of the Rainier Liquor Store, just across the Columbia River from Longview, Wash., said she has run the numbers and her business was up 15 percent in the past few days compared with the same time last month. In one extreme example of a price difference, she noted that a bottle of Patron Silver tequila that sells for $49.95 at all Oregon liquor stores was selling for an extra $13 at a Longview grocery store.
Along with the new fees, Washington residents accustomed to shopping in no-sales tax Oregon are unhappy with the 20.5 percent retail sales tax now included at the cash register in their state. When Washington had state-run liquor stores, the tax was included in the purchase price on the shelf, so nobody paid much attention.
A shopper at the Rainier store, Kris Delaney, a retiree from Winlock, Wash., told the Longview Daily News she supported liquor privatization in Washington, “Until I found out the tax was added on — a big one.”