Booze Scalpers in Washington State

Washington State shoppers can now got to a store and buy distilled spirits. Hurray for the free market! Hold the balloons and confetti, however.

The state and their buddies in the now defunct liquor stores and smaller grocery stores are still making sure that you pay big time for it in what can only be called a professional scalping scam. In fact, the scam is not unlike what the professional ticket scalpers do. There’s the list price and then when you go to pay for it all there’s a HUGE fee. That fee is $3.00/liter plus .50 per bottle. So a gallon of Smirnoff Vodka may say on the shelf that it’s $44.95 (!) but when it’s rung up at the check out counter it’s actually $51.45! I mean this is so bad we’re in Ticketmaster-land. If booze were a ticket, Eddie Vedder wouldn’t drink it.

When the Victoria Taft Show took up this issue Friday (hear the segment here), we found out that shoppers were disgusted when they found out at the check out stand that the fifth of Jack Daniels wasn’t really the sticker price! It was $3.50 more! Why this bait and switch?

((see shocking price differentials below–yes, SHOCKING))

The state worked a deal with smaller purveyors of booze to add so much tax that it would help insulate them from competition from Costco. You read that right. The smaller stores were afraid that Costco would become category killers in the booze market. (Costco helped support the initiative that was passed by voters.) The upshot is that customers got to the check out line only to be told that the price of Jack was actually 40% more!  Disgusted, they left the store without it. The state taxes still hugely distorts the market for booze.

But you might say, at least there’s a freer market, Victoria. You’d be right. At least it’s a little freer. But how free?

Friday on the show we did a price comparison. Oregon is the only state on the west coast that has the state control the rum running business. California simply charges the sales tax on the booze without the onerous excise taxes. Check out those price differentials and what real competition does to the price of an item.

Smirnoff  half gal
Wa   $44.95 + tax ($51.45 at the register)
Or   $27.95
Cali  $15.54

Jack Daniels 5th
Wa-  $18.99 +tax ($22.49 at the register)
Or    $21.95
Cali  $14.43 (actual market price!)
Beefeater gin
Wa- $19.99+ tax ($23.49 at the register)
Or   $19.95
Cali   $14.43
Smirnoff  half gal
Wa   $44.95 + tax ($51.45 at the register)
Or   $27.95
Cali  $15.54
Bacardi + tax ($24.49 at the register)
Wa   $20.99 + tax
Or   $26.95
Cali   $15.54
Absolut ($52.49 at the register)
Wa  $44.99  + tax
Or $44.95
Cali   $23.32
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