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Grocers Mull Idaho Liquor Privatization

Thu, 01/12/2012 - 3:58am

BOISE, Idaho (AP) — A grocery industry lobbyist met with Gov. C.L. "Butch" Otter and other officials last month over mounting a campaign to privatize Idaho's state-controlled liquor sales, as retailers like Costco Wholesale Corp. hope privatization success in neighboring Washington late last year will spread elsewhere.

Northwest Grocery Association President Joe Gilliam met with Otter staff, as well as Secretary of State Ben Ysursa, on Dec. 20 to learn how to get a voter initiative on next November's ballot. Gilliam must collect 47,432 registered voter signatures by April 30.

That tight deadline means a well-funded campaign is necessary, because proponents would likely need paid signature gatherers. Retailers like Costco, which committed $22 million for Washington's measure, see untapped profits from states like Idaho that now sell liquor via highly regulated state stores.

"It was a meet and greet procedure," Ysursa said on Wednesday, of his meeting with Gilliam. "They wanted to know the procedure, how it gets on the ballot, the deadlines."

Idaho is among 18 states that still have broad control over liquor distribution, a historical legacy with roots back to the repeal of prohibition.

In January 2011, Otter went on the record as saying he thinks liquor sales is one area of commerce where he thinks the state has an appropriate role to play. That's because of the state Constitution's requirement that Idaho should promote temperance. "The first concern of all good government is the virtue and sobriety of the people," according to the 1890 Constitution.

The Republican governor says he hasn't changed his mind.

"I just don't think Idaho is the environment where that's going to find a soft landing," Otter said.

Some lawmakers also wonder why a change is needed.

"There's nothing wrong with the system we have now," said House Majority Leader Mike Moyle. "If it isn't broke, don't fix it."

In Washington, 60 percent of voters in November supported a plan to privatize liquor sales and dismantle controls that have been in place since Prohibition, in a campaign that was the costliest in state history with Costco's contribution. The measure would allow stores larger than 10,000 square feet to sell liquor.

Gilliam, whose group has also been in talks in Oregon over a similar push, didn't return a phone call seeking comment.

But his Idaho lobbyist, Roy Eiguren, said one of the key reasons to push for privatization in Idaho was philosophical.

"There is a fundamental question about whether the state wants to be involved in a private-enterprise function," Eiguren said, adding he thinks private companies like Costco would do a better job at running liquor sales, potentially boosting revenue for beneficiaries that include Idaho cities, counties and courts.

Eiguren said the grocer group plans to decide within 10 days whether or not to press on with the initiative this year.

Idaho posted a $50.1 million profit from liquor sales in fiscal year 2011 that ended in July, as people paid more per bottle and as the agency that sells booze to Idaho trimmed staff.

In Washington state, wholesalers provided much of the opposition funding, as retailers will now be able to bypass them and buy product directly from producers.

Idaho foes are already organizing, led in part by the Idaho Beer & Wine Distributors Association, whose products are sold through grocery stores.

Jeremy Pisca, the group's lobbyist, contends adopting something akin to what Washington voters approved would throw the industry into turmoil — and potentially upset the careful balance Idaho has struck with regulating a product that Idaho's founders concluded was a threat to the moral stability of residents.

"They'll sell it to you as privatization, but really, this is deregulation," Pisca said. "Liquor is a product that needs to be regulated. If consumed irresponsibly, it can have serious consequences."

The question of privatizing Idaho's liquor stores isn't new.

Last year, a state agency, the Office of Performance Evaluations, scrutinized how Idaho could boost profits from its liquor business and what the impact of privatization would be. Auditors didn't predict significant new revenue to Idaho with such a move.

"We estimate that completely converting the state to a private system and establishing a liquor tax could generate about the same amount of revenue each year as the state currently receives," they wrote in their Jan. 31, 2011 report.

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