Weekly Update: Liquor Control Board to adopt rules to fix pricing for spirits and wine

The Liquor Control Board (LCB) has signaled it plans to adopt a final version of rules that prohibit restaurants and bars’ ability to negotiate and receive preferential pricing on September 9. The adoption of these rules will be met with an immediate legal challenge to the LCB’s authority to set prices and designate a marketplace winner – and loser. The WRA has been working to stop the LCB from taking this action for more than two and a half years. We are disappointed in the renewed effort to adopt policies that will result in increased costs across our industry. The rules violate a key principle of privatization that benefits restaurants and bars – our ability to seek and negotiate price differentials based on any bona fide business reason. The rules will:

  • Establish uniform pricing by prohibiting price differentials (a practice that is referred to as “channel pricing”),
  • Only recognize discounts based on volume for a single delivery for spirits and wine,
  • Prohibits price differentials based on business–business relationships (referred to as “family plan” pricing), and
  • Allow for an arbitrary exception if a spirits product has not been sold in the state for six months.

Ultimately, the rules insist that restaurants, which only sell spirits by the drink, must pay the same price as retail stores. The rules fail to take into account the differences in the marketplace between the two channels, the difference in customers served and the value of restaurants and bars in the chain of commerce. Additionally, the rules prohibit chain restaurants from negotiating volume discounts in certain circumstances.

Since 2012, there have been approximately five different versions of the rules, all which negatively impact the hospitality industry. Hundreds of restaurants, bars and hotels have provided detailed comments to the LCB. The WRA commissioned an independent economic study so the LCB could see how the practices it seeks to prohibit are customary for goods of all kinds. We also provided several legal analyses showing that the proposed rules violate the LCB’s authority. The WRA’s legal concerns have also been joined by numerous stakeholders. While we are frustrated, the LCB appears to be on track to adopt the rules, and the WRA is prepared to defend the industry by filing an immediate legal challenge. We hope WRA members will join our call to delay the implementation of the rules until a court can rule on our challenge. For more information, contact the WRA’s Julia Gorton at juliag@warestaurant.org. If you’d like to stay up to date on this, and all other alcohol topics, please join our alcohol taskforce by contacting the WRA’s Shannon Garland at Shannong@warestaurant.org. And remember that the WRA’s 2015 Alcohol Summit takes place at the Rhein Haus, 912 12th Ave., Seattle, September 16, noon-3 p.m. Mark it on your calendars. More details to follow.

WRA endorses Mary Dye and Teri Hickel in House races – Ballots must be in by August 4

Two seats in the Washington State House are on the fall ballot. In the 9th Legislative District, in Southeastern Washington, the WRA has endorsed current Rep. Mary Dye, R-Pomeroy. For more information on Mary Dye, go to http://houserepublicans.wa.gov/mary-dye/.

In the 30th Legislative District, a swing district currently represented by a Democrat, straddling Pierce and King counties, the WRA endorsed Republican candidate Teri Hickel. As the interim CEO of the Greater Federal Way Chamber of Commerce and through her volunteer work in local schools, Hickel has demonstrated leadership and has been endorsed by the Seattle Times. Hickel would be an important addition the House, which is currently split 51 Democrats to 47 Republicans. For more information on Teri Hickel, see http://terihickel.com/. And don’t forget that your ballots must be in the mail and postmarked by Tuesday, August 4.

Mark your calendars for Golf FORE! Education – A fun way to support the industry, September 22

Golf FORE! Education supports ProStart, the WRA Education Foundation’s culinary arts program that trains our future hospitality work force. ProStart provides high school students with culinary techniques to management skills, utilizes an industry-driven curriculum that is a nationally accredited technical training program, is mentored by industry professionals to provide real life experiences that build practical skills and a foundation that will last a lifetime and gives participants the knowledge and skills needed for today’s demand for skilled employees. Your involvement, support and generous donations have a huge impact on growing and developing the hospitality industry, your communities and the potential of our upcoming workforce! This will be a fun filled day for all at the Washington National Golf Club (14330 SE Husky Way, Auburn) on Tuesday, September 22. Your golf registration will include prizes for 1st, 2nd, 18th and 36th place, contests for closest to the pin, longest drive, lunch, gift bag, range balls, scramble golf and cart. Register now online. Deadline is September 14. For more information on registration and sponsorship opportunities, contact the WRA’s Bernadette Irish.

Sushi Joa, Manito Tap House on DineNW radio show – now online

Don’t miss this week’s DineNW radio show online. Co-hosts Andy Cook and Paul Schlienz kick off the show by interviewing Greg Kim, owner of Sushi Joa, in Kirkland and Mercer Island. Andy and Paul then chat with Patrick McPherson, owner of Spokane’s Manito Tap House.

Washington Restaurant Market Watch: Restaurants provide great opportunities for women

Restaurants really are a great pathway for advancement, and nowhere is this more visible than in the opportunities they provide for women. Currently, women either own or co-own more than 50 percent of all restaurants in the United States. Additionally, 45 percent of food service managers nationwide are women, according to the Bureau of Labor Statistics. Read more…

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