*Editor’s Note: It should be noted, that Paul doesn’t necessarily speak for all of the wineries currently listed on the Family of WA Wineries website. This is a touchy subject for some business owners.
There has been a great deal of uproar as of late of the pending ballot initiative 1183 in Washington State. On the surface, it looks to do away with the prohibition-era laws that allow the State to control the sale of spirits. On the surface, that looks mighty fine to most folks you talk to, however, there is some underpinning language in it that may impact smaller wineries.
I recently had the chance to catch-up with Paul Beveridge, President of the Family Wineries of Washington – a long list of family-run wineries who stand to gain or potentially lose if this initiative passes:
WF: There’s been concern over the “uniform wholesale pricing” going away and that could make it harder for smaller wineries. As the owner of a very small winery, what are your thoughts?
Paul: I will sell more wine if I am permitted to give my best restaurant and wine shop customers quantity discounts, and they will be encouraged to buy more of my wine. Every winery is Washington gives a case discount to their retail customers, why should they be prohibited from doing the same for their wholesale customers?
WF: How do you think this will affect small wine/beer retail shops?
Paul: It will be great for wine as it will allow volume discounts. I do not like the fact that small wine/beer retail shops will not get to have a spirits department. I would support a bill in the legislature to allow true wine/beer retails shops (not mini-marts) to have spirits sections. We asked the coalition to make this change, but they got so beat up about minimarts under 1100 that they could not. And note that the big distributors are still arguing in their ads that mini-marts will be able to sell spirits (a fabrication).
WF: Should the bill pass, and stores start making room to bring in spirits, what do you anticipate happening to their available retail space that now might include some of the smaller wineries?
Paul: I expect it to get larger due to the availability of quantity discounts. The mark up on wine and spirits is one of the highest in a retail store. They will get rid of low margin items like paper towels before they will reduce the wine section. And if they don’t, small specialty wine shops will be happy to fill the void.
WF: Do you see think that 1183 will put smaller retail shops at a disadvantage to larger stores, like Costco? Why?
Paul: No, small retail shops have never tried to fight toe to toe with giant retailers like Costco. Small shops make their money by providing more service, selection and quality than the warehouse stores. Costco will continue to sell the commodity wines (and spirits) and small wine shops will continue to sell the unique and interesting wines.
WF: Doesn’t the 10,000 sq. ft. minimum put those shops at a huge disadvantage because they can’t sell spirits as well?
Paul: I agree. This should be changed.
WF: Spirit sales are a good revenue source for the State of WA – are you at all worried that the State will come up with new taxes/fee’s – passed on to everyone (even those who never went into liquor stores) as a way of making up that missed revenue?
Paul: No, the coalition made sure that the state would make more money, not less, under 1183.
Thank you for your input, Paul – it’ll be interesting to see what happens as voters head to the polls!