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Oregon Rethinks Liquor Sales

Mon, 12/19/2011 - 7:52am

PORTLAND, Ore. (AP) — Oregon state officials hope to avoid losing control of liquor sales, as happened in Washington state this fall, by opening up the state-run retail operation, including giving grocery chains a chance to open "store within a store" outlets.

The Oregon Liquor Control Commission also proposes to allow more existing state-franchised stores to offer beer and wine, The Oregonian (http://is.gd/A3QlCk) reported.

Together, the proposals could mean major changes in the way Oregonians buy their liquor.

But a lobbyist for grocers called for a broader expansion of sales and said anything less "probably lights the fuse for an initiative campaign."

The proposals come on the heels of a ballot measure in Washington where voters approved a privatization plan that ends the state's monopoly and allows liquor sales at Costco and other big grocery stores.

Oregon officials, including Gov. John Kitzhaber, hope to avoid a similar public revolt.

Under a system instituted in 1933 as the nation emerged from the Prohibition era, the state controls package liquor sales from a Portland distribution center through 242 retail stores run by agents under contract.

The rule changes wouldn't lead to a sudden proliferation of outlets, and the commission would decide on a case-by-case basis who gets a liquor sales license and which agents get to add wine and beer sales, said Merle Lindsey, deputy director of the commission.

"We're still looking at this from the control model," Lindsey said.

But, he said, "We want larger stores. We want consumers to have more products to choose from. We want a great customer experience."

One change would allow corporations to become liquor agents, giving businesses such as Safeway or Fred Meyer the ability to open "store within a store" liquor outlets. Grocery shoppers could buy liquor at a separate area within the retail operation.

Another would allow far more liquor stores to become "non-exclusive," allowing them to sell beer and wine and, Lindsey said, giving them a chance to raise money for expansion and remodeling to help overcome a reputation for being small and hard to find.

The rule changes go before the five-member commission in March — giving the Legislature a chance to weigh in when it meets in February.

Kitzhaber "would be supportive of efforts to modernize and improve customer service and choice," said spokesman Tim Raphael. He said Kitzhaber hasn't been briefed on the proposals.

The idea meets favor with liquor agent Barry Karimi of Lake Oswego, who has been in the business since the mid-1990s.

"You go into some liquor stores and it's like going back 40 years," says Karimi. Opening up the system, he said, "will give us a chance to modernize."

Critics of the looser rules include convenience store owners, who worry about losing business, and big grocers, who say the changes don't go far enough.

Lobbyist Joe Gilliam, who represents Northwest grocers, said the commission is "trying to do it half-way."

"The idea that liquor stores should have beer and wine, in our view, is an admission by the OLCC that it's time to change the system," he said. "If you allow beer and wine at liquor stores, then allow liquor at grocery stores."

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