Friday, June 1, 2012

Liquor Privatization

Today is the first day of liquor privatization in Washington State. I decided to celebrate by purchasing a bottle of Jameson at Safeway.

One question people had about privatization was how it would effect prices.  It turns out that prices have gone down 20-30% (for now at least).

Before Privatization:     $29.95
Now:                                 $23.99

That's a 20% decrease.  I also checked some of the other brands.  The very low-end brands (like 80 proof Monarch vodka) had a 30% decrease.

So where did all that extra money go?  It actually didn't go to the State of Washington.  This initiative was written specifically to keep the State's revenue higher (revenue will probably go up, because of an increase in sales).

So where did the money go?  It could be that Safeway is using this as a loss-leader.  Losing money on these items because it brings people into their store.  More likely, however, is that Safeway is more efficient than the State of Washington.

There are many things that governments are good at, but running a retail store isn't one of them.  I'm glad we've found a more effective way to raise revenue for the state.  Now our state bureaucracy can stick to collecting taxes and enforcing the law instead of stocking shelves.

(edited to correct my data entry on the prices).