Costco making another wine push

[Roy Hersh]

http://seattletimes.nwsource.com/html/p ... ative.html

[Moses Botbol]

Please let it happen! We'll see some amazing prices out of it. Just picked up a 6 pack of Vietti Castiglioni 2007 for $31 bottle. Imagine if they could do even better than that?

[Andrew E]

I'm torn on this one. I don't have any of the "save the kids" worries, but this law is not as good as the one that was up to vote last time. This one has more restrictions and might not cut prices as much as people would like to.

A lot of my thoughts are speculation though, hopefully privatization works as well here as it does in other states.

On a side note, I recently picked up some Kirkland 10 year that finally made it to my Costco. Hopefully trying it soon.

[Glenn E.]

I think the problem last time was that there were two up for vote at the same time, so they competed with each other for attention. That made it a bit confusing, and people who are confused about initiatives tend to just vote "no" on them.

[Andrew E]

I think the problem last time was that there were two up for vote at the same time, so they competed with each other for attention. That made it a bit confusing, and people who are confused about initiatives tend to just vote "no" on them.

You might be right. I remember the bad one of the two lost 70/30, and the really good one lost 53/47. Maybe just enough confusion to turn the good one down.

[Andrew E]

1183 passed. Hopefully we'll see some cheaper prices come June when the legislation goes into effect.

[Roy Hersh]

Don't count on that. Even with a tier taken out of the equation ... this could lead to LESS choice on the shelves for wine lovers like us, and the alc. tax isn't going away here in WA either. Likely the savings of buying (with Costco and supermarkets utilizing greater economies of scale and now having the ability to incorporate some direct purchases) will result in the companies holding on to their savings and passing along very little IF ANY of it. Why am I skeptical? Costco didn't shell out $22m in order to pass along savings. IN FACT they NEVER once said that was part of their rationale for "buying" the passage of this "initiative." What bugs me most is the way that a huge company can be so blunt about buying a win by non-stop advertisements and phone calls which inundated us all.

Don't get me wrong, privatizing state run liquor stores is not a bad thing, nor having volume discounts for big buyers. I just don't believe for a second that we will see better prices on wine here in WA ... and ultimately, I don't necessarily see this as a win for us, the consumer. And to present my willingness to show disdain for the other side of the coin, WSWA which represents, lobbies and sets up PAC's for the huge interest$ of wine distributors (in the USA) ... were fighting with the rest of the "initiative" naysayers, delivering infomercials with nonsense about public safety/drunk driving/kids buying alc. if unregulated or non-state run, etc. was going to doom us all. It is all about the big bucks controlling our lives. I know it IS how things work, but disturbing nonetheless.

Again, to be clear ... for me as a citizen here in WA ... show me how this is going to realistically reduce our prices. Nobody can do that as of yet and certainly NOT Costco. Show me where they have said this will be a good thing for the consumers in lowering prices for US, PLEASE!

[Mark Hudson]

Roy,

This is anecdotal at best, but at least its one data point.

For most of my life I lived in VA with state run liquor stores. I now live in NV where anyone (almost) can sell liquor. Imagine my shock from growing up in a state where the liquor store closed at 6pm and was never open on sundays, to living in NV where the 7-11 sells bottles all day and night everyday.

Anyway to your point.

I find prices here at costco MUCH cheaper than ANY price in VA, and in fact I find costco prices on liquor here cheaper than MOST other stores in the area.

For instance I am a Gran Manier fan. In VA I have seen prices between 35-40 for 750ml.

In Costco here its below 20.00

I also have seen how costco forced other local merchants to lower their prices.

An example. There is a local liquor and wine chain (Ben's). I was shopping there for wine one day and wandered over to the liquor section to get a bottle of GM. They had it priced around 30. I made a comment to the manager that while I didnt mind paying more for the convenience of walking into the (close to my house) shop, I wasnt going to pay 50% more.

About a month later I was back in the same store and noticed the price had been dropped to 22.00

I wouldnt be so sure you wont see prices coming down over time in WA.

[Andrew E]

Don't count on that. Even with a tier taken out of the equation ... this could lead to LESS choice on the shelves for wine lovers like us, and the alc. tax isn't going away here in WA either. Likely the savings of buying (with Costco and supermarkets utilizing greater economies of scale and now having the ability to incorporate some direct purchases) will result in the companies holding on to their savings and passing along very little IF ANY of it. Why am I skeptical? Costco didn't shell out $22m in order to pass along savings. IN FACT they NEVER once said that was part of their rationale for "buying" the passage of this "initiative." What bugs me most is the way that a huge company can be so blunt about buying a win by non-stop advertisements and phone calls which inundated us all.

Don't get me wrong, privatizing state run liquor stores is not a bad thing, nor having volume discounts for big buyers. I just don't believe for a second that we will see better prices on wine here in WA ... and ultimately, I don't necessarily see this as a win for us, the consumer. And to present my willingness to show disdain for the other side of the coin, WSWA which represents, lobbies and sets up PAC's for the huge interest$ of wine distributors (in the USA) ... were fighting with the rest of the "initiative" naysayers, delivering infomercials with nonsense about public safety/drunk driving/kids buying alc. if unregulated or non-state run, etc. was going to doom us all. It is all about the big bucks controlling our lives. I know it IS how things work, but disturbing nonetheless.

Again, to be clear ... for me as a citizen here in WA ... show me how this is going to realistically reduce our prices. Nobody can do that as of yet and certainly NOT Costco. Show me where they have said this will be a good thing for the consumers in lowering prices for US, PLEASE!

That's actually what I've told many of my friends and they yelled at me for heresy against privatization, lol. There really is nothing stopping Costco and the other larger companies from keeping prices high and pocketing the profit, especially when they partially cut out smaller competition. I suppose I was just being more optimistic on this forum

[Roy Hersh]

It would be a great thing all around IF prices actually would come down. I'd be all for it then. Pass on "some" of the saving they realized by buying better. Seems like good business, right? We'll see what happens. The jury is DEFINITELY still out on that one though we can always hope.

[Stewart T.]

I think one point to also consider is that Costco has made a reputation of buying in large volume and offering "many" items for more cheaply than you could find at your local grocery store. Sure, you sometimes have to buy the costco size of paper towels or the costco multi-pack of spaghetti sauce, but on a per unit basis, it is normally cheaper for me to buy those items at costco rather than the same amount at another store. Thankfully, I have ample storage for 48 rolls of paper towels in my basement... :)

Certainly profit margins are important to Costo - they ARE in business to make money - but they have done so more on volume+low price rather than selling items at premium prices. I just have a hard time wrapping my head around the idea that Costco would pump $22m into this campaign, then charge the same amounts that the state liquor stores were previously charging. I don't FEEL like it will impact me tremendously...I end up buying a lot of my wine from out of state or from my favorite local wine shop, and usually only pick up wine at Costco if I see the Kirkland 10 year old Tawny by Fonseca (at $16 it rocks), or maybe trying one of the other Costco/Kirkland brand varietals or champagne if the mood strikes me.

I can see one possible down side to this change in the law, and that would be small spirits producers (of which there are a surprisingly lot of here in Seattle) not having guaranteed space on the state liquor store shelves.

I have to say that the most disappointing thing about this initiative was all of the advertising that cherry-picked portions of fact and invented the rest to fit their particular positions. I don't believe that every teen in Washington State is at this very moment heading down to their local mini-mart to grab a fifth of Jack Daniels so they can drink and drive. It's sad when the political commercials adhere to the old adage "never let the facts get in the way of a good story."

Nevertheless, the State liquor stores have i think around 6 months to completely shut down and sell off all of their inventory, so it should be interesting to watch this all unfold.

[Glenn E.]

Nevertheless, the State liquor stores have i think around 6 months to completely shut down and sell off all of their inventory, so it should be interesting to watch this all unfold.

I believe that I read somewhere that those locations are "grandfathered" and can continue to operate as liquor stores whether or not they meet the 10,000 sq ft minimum if they are purchased by the deadline. That'd be a good thing, I think, as it would provide continuity.

[Roy Hersh]

In a purchase scenario, the new privatized owner of a former state liquor store would have to purchase the entire inventory of that store which averages about $175,000 per shop. That is not a big number, but for those that were former managers who were hoping to become owners, it might be less feasible then they initially thought. We'll see in time.