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Originally published Thursday, May 23, 2013 at 3:55 PM

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Guest: Repeal liquor fee for retailers to supply restaurants

The 17-percent fee when local retailers and grocers supply liquor to restaurants has left local businesses at a competitive disadvantage, according to guest columnists Anthony Anton and Joe Gilliam.

Special to The Times

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MORE than 6,500 retailers and restaurants in every community of this state are ready to do business with each other. But they can’t because of an administrative decision by the state Liquor Control Board to impose a 17-percent fee when local retailers and grocers supply restaurants, but not when distributors do. This decision has benefited multibillion-dollar companies while leaving local businesses at a significant competitive disadvantage.

Fortunately, the Legislature is poised to correct this terrible situation in the special session. At the end of the regular session, lawmakers were within a hair’s breadth of correcting the Liquor Control Board’s erroneous fee imposition. Lawmakers on both sides of the aisle fully recognize that the market-based system voters adopted in 2011 has not been fully established because of the board’s administrative decision.

Accordingly, a bipartisan coalition of legislators introduced legislation, 2SHB 1161, to repeal the 17 percent retail license fee in a manner that protects state revenues, protects those who invested in former state liquor stores and allows for competition to flourish between retailers and restaurants.

The opponents of this change are two large out-of-state distributors who are striving to protect their market dominance. They currently control 94 percent of the wholesale liquor market in Washington, and they don’t want competition from retailers. Their objective is to maintain the market dominance voters rejected when they adopted Initiative 1183.

The days of Prohibition-era rules and regulations governing the sale and distribution of liquor are over. The Liquor Board’s imposition of the fee is an attempt to go back in time to the old system of national distributors controlling the market.

Fortunately, an overwhelming majority of legislators on both sides of the aisle understand that it’s time to move forward with what the voters adopted in 2011. They reject the premise that two companies are entitled to unearned market advantage. These lawmakers embrace the idea that local retailers can do business with local restaurants.

Initiative 1183 has accomplished much of what the voters envisioned when it was overwhelmingly adopted. Consumers have choice, options and convenience. The state is receiving more revenue than ever before from the privatized system. But the Board’s administrative decision to impose a fee on retailers trying to do business with local restaurants has squelched the formation of a competitive marketplace for businesses across Washington state.

The good news is that the bipartisan coalition of legislators has carefully developed a balanced proposal to correct the liquor board’s decision. All that’s left is for legislators to finish the job.

Reaching that solution will allow more than 6,500 businesses in every community in Washington state to compete for new business, adding new competition and choice to the marketplace approved by voters with Initiative 1183. Let’s complete this work.

Anthony Anton, left, is the president and CEO of the Washington Restaurant Association. Joe Gilliam is president of the Northwest Grocery Association.

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