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(SeattlePI)   Washington state privatized the sale of hard liquor last year, believing it would drive prices down. Take a wild frickin' guess what happened. Who knew people like booze and money, and getting more money off of deregulated booze?   (seattlepi.com) divider line 142
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12067 clicks; posted to Main » on 01 Jan 2013 at 4:11 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-01-01 11:49:47 AM  
Or course, the state made sure to add in a few extra taxes for several years to make up for no longer illegally running a monopoly after several decades.  Might want to revisit the issue in a few years once they expire.
 
vpb [TotalFark]
2013-01-01 11:51:34 AM  
Let me guess.  The same thing that always happens then something is privatized or deregulated?
 
2013-01-01 12:23:34 PM  
Nobody believed it would lower the price.  Stop acting like a victim.
 
2013-01-01 12:27:54 PM  

The My Little Pony Killer: Nobody believed it would lower the price.  Stop acting like a victim.


I thought competition always drove down prices.
 
2013-01-01 12:28:30 PM  

Dinki: The My Little Pony Killer: Nobody believed it would lower the price.  Stop acting like a victim.

I thought competition always drove down prices.


Costco competing with whom?
 
2013-01-01 12:43:59 PM  

LordZorch: Or course, the state made sure to add in a few extra taxes for several years to make up for no longer illegally running a monopoly after several decades.  Might want to revisit the issue in a few years once they expire.


Yeah, this.  Take the taxes off, and it is indeed less expensive.  Unfortunately, they will NEVER let that happen - the Statehouse knows people aren't going to stop buying booze.  This is a cash cow for them.
 
2013-01-01 12:48:02 PM  
Collecting taxes off marijuana sales: good.

Collecting taxes off liquor sales: omg cash cow.
 
2013-01-01 01:07:52 PM  
Give it time.  The prices will come down as competition heats up... or not... depending on how difficult Washington state makes it to obtain a permit to sell packaged goods.
 
NFA [TotalFark]
2013-01-01 02:18:24 PM  

The My Little Pony Killer: Nobody believed it would lower the price.  Stop acting like a victim.


So higher cost products is a good thing?

YAAAAA privatization!!!
 
NFA [TotalFark]
2013-01-01 02:27:01 PM  

Benevolent Misanthrope: LordZorch: Or course, the state made sure to add in a few extra taxes for several years to make up for no longer illegally running a monopoly after several decades.  Might want to revisit the issue in a few years once they expire.

Yeah, this.  Take the taxes off, and it is indeed less expensive.  Unfortunately, they will NEVER let that happen - the Statehouse knows people aren't going to stop buying booze.  This is a cash cow for them


FTA- "The state's 51.9 percent mark-up went away but was replaced by fees of 10 percent on distributors and 17 percent on retailers."

51.9 - (10+17) + 10 increase = 14.9% privatization fee
 
2013-01-01 03:56:31 PM  

NFA: Benevolent Misanthrope: LordZorch: Or course, the state made sure to add in a few extra taxes for several years to make up for no longer illegally running a monopoly after several decades.  Might want to revisit the issue in a few years once they expire.

Yeah, this.  Take the taxes off, and it is indeed less expensive.  Unfortunately, they will NEVER let that happen - the Statehouse knows people aren't going to stop buying booze.  This is a cash cow for them

FTA- "The state's 51.9 percent mark-up went away but was replaced by fees of 10 percent on distributors and 17 percent on retailers."

51.9 - (10+17) + 10 increase = 14.9% privatization fee


Not getting your point?  Serious question, not snark.  It seems like there was a 51.9% markup, and now there's only a 27% markup?
 
2013-01-01 04:17:18 PM  
You know what subby? I'll pay more for my booze, knowing the government isn't wasting money on the upkeep the stores and the land cost, and using it as an excuse to overpay basic retail and offer pensions to push a few buttons and take my money for lotto tickets. gfy.

Also true to form though, they still get all that tax money, plus what they now save not owning the stores or paying those employees...and we still need to raise taxes. So we got that going for us.
 
2013-01-01 04:17:43 PM  

The My Little Pony Killer: Collecting taxes off marijuana sales: good.

Collecting taxes off liquor sales: omg cash cow.


Heh. Good point.
 
2013-01-01 04:18:30 PM  
the prices might be higher because the types of liquor being sold now is of a higher quality than what was sold before.  privatization may be responding to a market demand for more higher quality (and thus more expensive) liquor.
 
2013-01-01 04:19:06 PM  

LordZorch: Or course, the state made sure to add in a few extra taxes for several years to make up for no longer illegally running a monopoly after several decades.  Might want to revisit the issue in a few years once they expire.


How was their monopoly illegal?
 
2013-01-01 04:19:18 PM  

Dinki: The My Little Pony Killer: Nobody believed it would lower the price.  Stop acting like a victim.

I thought competition always drove down prices.


Unless there is collusion.

And yeah, in the long run prices with drop.
 
2013-01-01 04:19:29 PM  

The My Little Pony Killer: Dinki: The My Little Pony Killer: Nobody believed it would lower the price.  Stop acting like a victim.

I thought competition always drove down prices.

Costco competing with whom?


BJ's?
 
2013-01-01 04:19:30 PM  
I figured it wouldn't lower prices, but it certainly didn't add that much convenience. To get a pint or mini bottles you still have to schlep out to the private retailers who took over old state store locations. Sure, if you want a fifth or a handle of widely-available spirits Safeway has you covered, but at a price. Add to this the almost 1/3 higher price due to tax and big-store mark-ups and you have little to show for it.
 
2013-01-01 04:19:51 PM  
I can't see why I should care about liquor prices in Washington state. Or whether they are privatized.

Was this link greened so people could have a political fight over pet issues?
 
2013-01-01 04:19:53 PM  

The My Little Pony Killer: Dinki: The My Little Pony Killer: Nobody believed it would lower the price.  Stop acting like a victim.

I thought competition always drove down prices.

Costco competing with whom?


Not defending either one of you, but Costco competes with Sam's and BJ's. Even if you don't have but one of the three locally, they are still in a national competition.
 
2013-01-01 04:20:14 PM  

downstairs: NFA: Benevolent Misanthrope: LordZorch: Or course, the state made sure to add in a few extra taxes for several years to make up for no longer illegally running a monopoly after several decades.  Might want to revisit the issue in a few years once they expire.

Yeah, this.  Take the taxes off, and it is indeed less expensive.  Unfortunately, they will NEVER let that happen - the Statehouse knows people aren't going to stop buying booze.  This is a cash cow for them

FTA- "The state's 51.9 percent mark-up went away but was replaced by fees of 10 percent on distributors and 17 percent on retailers."

51.9 - (10+17) + 10 increase = 14.9% privatization fee

Not getting your point?  Serious question, not snark.  It seems like there was a 51.9% markup, and now there's only a 27% markup?


Even a dirt cheap retailer like Wal-Mart operates on a roughly 25% gross markup (that has to pay the rent, employees, etc).  It's likely the state was making around 27% on their 51.9% markup.
 
2013-01-01 04:20:25 PM  

douchebag/hater: Dinki: The My Little Pony Killer: Nobody believed it would lower the price.  Stop acting like a victim.

I thought competition always drove down prices.

Unless there is collusion.

And yeah, in the long run prices with drop.


Plus it may be that the State's prices were artificially low and they have now reached equilibrium.
 
2013-01-01 04:20:45 PM  
Well...now they've got wholesalers now, with their markup. And then the retailers have their markup. Taxes paid at each level. So really, there won't be much of a difference to the consumer. The retail experience might get better with selection. Quantity discounts will be made with large retailers, small retailers will be stuck without these discounts and will buy single cases instead of a whole pallet.
 
2013-01-01 04:21:12 PM  

vpb: Let me guess.  The same thing that always happens then something is privatized or deregulated?


They fixed the cable?
 
2013-01-01 04:22:11 PM  
It was clear that the prices were going to stay the same or go up. We passed the law to get the state out of the business of selling liquor, but the only way it could pass was to keep all the state revenue that the old system had. One visit to the Total Wine that recently opened makes me happy with my vote. A shop like that simply couldn't exist under the old laws.
 
2013-01-01 04:23:02 PM  

vpb: Let me guess.  The same thing that always happens then something is privatized or deregulated?


No. You have that backwards. The government is ALWAYS wrong, ALWAYS inefficient, and private businesses can ALWAYS do it better.
 
2013-01-01 04:24:18 PM  
The price per liter went up, but that doesn't say anything. If you're comapring a liter of Jack to a liter of Blanton's of course the price per liter went up.

/bad methodology is bad.
 
2013-01-01 04:24:55 PM  
Costs will also be higher initially as lots of people start selling booze that didn't before. They'll have to buy licenses, which they'll roll into the price. Plus the cost of setting up distribution routes, etc. Once all that stuff is ironed out and routine, the fixed costs should drop and those savings should be passed on.
 
2013-01-01 04:25:17 PM  
 
2013-01-01 04:25:58 PM  
Don't forget retail sales tax as well:

http://liq.wa.gov/stores/liquor-pricing

When the states ran the store they didn't collect sales tax and now they do. This is hardly a equal comparison. If you were to remove the additional taxes the price would in fact be below the price before privatization.
 
2013-01-01 04:27:25 PM  
I don't see anything about deregulation in that article. It was privatized not deregulated. Deregulation would mean that anybody can buy and sell a product. This is not the case in Washington state.
 
2013-01-01 04:28:12 PM  
Liquor is a luxury item, not a necessity. Deal with it.
 
2013-01-01 04:29:15 PM  
The government always insures that things like this are at least revenue-neutral.

That said, it's amusing seeing all the cars heading across the border to Oregon during/after the holidays. Tax-free shopping! Too bad there's no way for Oregon to fleece those Washington shoppers.
 
2013-01-01 04:30:06 PM  

smonter: Don't forget retail sales tax as well:

http://liq.wa.gov/stores/liquor-pricing

When the states ran the store they didn't collect sales tax and now they do. This is hardly a equal comparison. If you were to remove the additional taxes the price would in fact be below the price before privatization.


Shhh, you'll confuse the dumb masses with facts.
 
2013-01-01 04:30:53 PM  

mediablitz: vpb: Let me guess.  The same thing that always happens then something is privatized or deregulated?

No. You have that backwards. The government is ALWAYS wrong, ALWAYS inefficient, and private businesses can ALWAYS do it better.


In the case of selling something with inelastic demand like booze or gasoline, yeah privatization is pretty much going to get you better results, unless the government piles on taxes and regulations and such. There are different levels of privatization. IIRC this particular bill really favors the big box stores over smaller ones.
 
2013-01-01 04:31:13 PM  
Being a monopoly bulk buyer, they could buy cheaper and sell cheaper. Not only market wide, but across brands.

Inefficiency in the private markets drives prices higher; as sellers look to sell at top dollar, buyers bottom dollar, and you have to deal with all the middlemen and smaller operations. That's really good for the economy, but not directly better for a consumers bottom line. Top line though, as long as the new distrbutures stay inefficient, creating jobs and wealth.

Free Market Liquor in MA is more expensive than government monopoly liquor in Live Free or Die NH. The residents of NH aren't looking to privatize it anytime soon, because it's cheaper for them, raises revenue, and is sort a tourism industry to lure people over the border.
 
2013-01-01 04:31:36 PM  

The My Little Pony Killer: Nobody believed it would lower the price.  Stop acting like a victim.


Exactly this. This point was stressed during the initiative process. You got the convenience of more locations and hours to purchase in exchange for the price increasing.

/just happy that I get to buy my booze at the NEX in Everett
//their prices are dirt cheap
 
2013-01-01 04:34:31 PM  

Dinki: The My Little Pony Killer: Nobody believed it would lower the price.  Stop acting like a victim.

I thought competition always drove down prices.


Yeah, that's why gas is so cheap and affordable.

The only reason I ever heard from folks was they wanted purchasing to be easier. I didn't hear anyone saying they thought it would be tons cheaper.
 
2013-01-01 04:35:09 PM  
The prices are fine, it's the taxes that are out of control. Either way, the convenience of being able to get giant bottles from Costco while I'm shopping for other stuff or just grabbing something from QFC when I'm grocery shopping or at any time I want since they're 24/7 is much preferred compared to the limited hours and limited selection of the state run liquor stores. I'm much happier with it being privatized.
 
2013-01-01 04:36:08 PM  

Nabb1: Liquor is a luxury item, not a necessity. Deal with it.


No kidding. You can really tell when the poor white trash in Washington hates something....they will flood the newspapers with butt hurt.

ZOMG I have to pay an extra $3 for rot gut? How will I survive?
 
2013-01-01 04:36:41 PM  

Lord Dimwit: LordZorch: Or course, the state made sure to add in a few extra taxes for several years to make up for no longer illegally running a monopoly after several decades.  Might want to revisit the issue in a few years once they expire.

How was their monopoly illegal?


I was wondering the same thing. It would only be illegal if the state said it was illegal statutorily and clearly they didn't do that.

Arguing the public policy of the state retaining an exclusive right to deal in liquor is a different thing.
 
2013-01-01 04:39:09 PM  

cuzsis: Dinki: The My Little Pony Killer: Nobody believed it would lower the price.  Stop acting like a victim.

I thought competition always drove down prices.

Yeah, that's why gas is so cheap and affordable.

The only reason I ever heard from folks was they wanted purchasing to be easier. I didn't hear anyone saying they thought it would be tons cheaper.


Wait, now there's a state run monopoly on gas?
 
2013-01-01 04:39:54 PM  
The y are considering this same bullshiat in PA...here is the issue...the PA Liquor Control Board is the single largest purchaser from every major distiller and winery...they buy in volumes no wholesaler or retailer could come close to, so, obviously, they should get the best prices. I do not claim or think that we should, therefor, have the lowest liquor prices in the country(significantly lower prices would lead towards significantly higher health issues, for instance), but we should, at the very least, have prices comparable to, and competitive with, every surrounding state's, while collecting more in taxes and such, WITHOUT hurting the end consumer. The biggest issue to me, as an end consumer, is that there is NO discounting to the restaurant and bar industry other than not paying the base sales tax (6% statewide, 7% in certain cities)...which makes liquor MORE expensive in our restaurants and bars...
One would think that, properly run, the PA LCB could be a cash cow for the state economy, WHILE being competitive pricewise with the surrounding states. Somehow, this is not happening...THAT is what needs to be fixed...and not fixed by giving a huge gift to certain croneys of the Governor.
 
2013-01-01 04:41:17 PM  
Lived in IA when it was deregulated. Rather than rare, state-run liquor stores, we could buy vodak at 2am in a grocery store, between the bar and the after-party.


That is the upside.
 
2013-01-01 04:41:22 PM  

shintochick: Exactly this. This point was stressed during the initiative process. You got the convenience of more locations and hours to purchase in exchange for the price increasing.


Yep. There wasn't a liquor store in my neighborhood, so I normally had to drive north a few miles to Northgate. Now I can walk out of my house in my pajamas one measly block over to the QFC.

I can sort of understand some ire if you're a real aficionado for certain spirits since the grocery and drug stores usually don't have a HUGE selection, but otherwise I gladly play a few more bucks for the shameless convenience.
 
2013-01-01 04:41:30 PM  

NFA: The My Little Pony Killer: Nobody believed it would lower the price.  Stop acting like a victim.

So higher cost products is a good thing?

YAAAAA privatization!!!


It's a good thing when us non-alcoholics don't have to serve those raging boozers any more...

disclaimer: Drank beer until the Gout hit. But, take that, you drunks

The price will go down when the state taxes die off. (ya didn't think they'd lose that money easily, did ya?)
 
2013-01-01 04:42:47 PM  
So farking what? (FARK SACRILEGE ALERT) Alcohol is a want, not a need. (/FARK SACRILEGE ALERT)
 
2013-01-01 04:45:19 PM  

vpb: Let me guess.  The same thing that always happens then something is privatized or deregulated?


I guess you were not alive when we only had one phone company and the airlines were regulated.
 
2013-01-01 04:45:29 PM  

TorqueToad: I can't see why I should care about liquor prices in Washington state. Or whether they are privatized.


And yet here you are, commenting in a thread about exactly that topic.  Weird, isn't it?
 
2013-01-01 04:55:35 PM  

mediablitz: No. You have that backwards. The government is ALWAYS wrong, ALWAYS inefficient, and private businesses can ALWAYS do it better.


I know this is an attempt at sarcasm, but outside of public safety functions and sometimes infrastructure, can you provide a single example where this is not the case?
 
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