Consumers still buying despite sticker shock

POULSBO — Customers are surprised and, in some cases, ticked off at the jump in prices for liquor since sales were privatized, but they are still buying heartily.

Managers and owners of private retailers say customers benefit  from privatization mainly because of the convenience of picking up any of their favorite adult beverages when they’re getting gas or groceries.

Since the state stepped down and private liquor business began June 1 — in accordance with the passage of Initiative 1183 — the North Kitsap area went from two liquor stores to 10.

“People aren’t liking the tax but other than that [spirits] are selling,” said Jacob Clinton, manager at Rite-Aid in Poulsbo. However, “We’ve had some people put [bottles] back,” after they see the total price, he added.

Retailers are seeing a lot of customer confusion over the prices. The state didn’t raise the spirits taxes — a liter tax of 3.7708 per liter and sales tax of 20.5 percent based on the item’s selling price — but the tax was included in the price at state liquor stores. At many stores, shelves that hold bottles of whiskey and vodka also have signs posted explaining the taxes.

“The prices are steep, but I understand why,” said one customer at Rite-Aid — taxes collected are funneled back to local governments for prevention programs, law enforcement and emergency medical services. But this particular customer said she’ll continue to ask her friend in California to bring her some booze when she visits.

The price jump stems from the initiative, which included a 10 percent fee on distributors and a 17 percent fee for retailers, marking up the price. And across the state, spirits distributors are struggling to meet the demand of the hundreds of new retailers, which is why your local store shelf may seem empty.

“So far, we’re having issues with getting product,” said Steve Dixon, manager at Kingston’s IGA market, and echoed by many other managers. “Sales [have] not jumped off the shelf yet.

“It’s a whole new thing for us too, we don’t know how many people in this small community are hard liquor drinkers,” Dixon added.

Jeff Uberauga, owner of Red Apple Market in Poulsbo, said he thinks it will take the next few months to sort out distribution and pricing, but he will see a “positive outcome once [distributors] catch up.”

“It's an added item to the store that is an added convenience for our customers,” Uberauga said. “I’ve seen the added convenience in the last [few] days. We’re a one-stop shop.”

Poulsbo’s previous state liquor store is still a liquor store, but apparently not many folks know it. Peter Crabtree, owner of ChocMo bistro on 8th Avenue, bought the liquor store next to his business and re-named it High Spirits.

“The biggest issue we’re up against is people think all [state] liquor stores went away in November,” he said. However, what has helped his business’s prices is its location — Crabtree also bought all the state store’s inventory. His focus for High Spirits is to bring a wider selection than what is at the grocery store — craft beers along with locally made spirits.

“I wanted to bring into Poulsbo what I wanted the liquor store to be,” he said. Crabtree continues to keep it local, by working as a local distributor to several area restaurants, such as MorMor in Poulsbo and the Point Casino.

The Point Casino, as a Port Gamble S’Klallam tribal entity and an “on-license” business — meaning it sells alcohol for immediate consumption — does not charge the spirits tax. Gliding Eagle, the tribe’s gas station and convenience store, however, is an “off-license” business. While state law says the state can’t impose a tax on tribal citizens making purchases on the reservation, the tribe can impose those spirits taxes.

Rather than try and confirm the eligibility for each purchaser, the tribe will charge everyone the taxes, and is working with the state on a formula for reimbursement based on population and liquor consumption, said Noel Higa, director of the Port Gamble Development Authority.

Higa said they too are having trouble stocking their store, but expects prices and distribution schedules to flush out in the next few months.

“Everybody’s trying to figure out what portion of the market we all best serve, then we’ll know how competitive we can be,” he said.

 

Contact North Kitsap Herald Megan Stephenson at mstephenson@northkitsapherald.com or 360-779-4464.

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