Would liquor privatization hurt our burgeoning micro-distillery business?

Kari Chisholm

I've been thinking a lot about the proposed ballot measures to get the state out of the liquor business.

On the one hand, the idea that the state should be involved in the booze business seems a bit silly. I've long thought that the OLCC has rules that are both heavy-handed and absurd.

On the other, what really matters to me is protecting Oregon's strong wine and beer industries and burgeoning micro-distillery industry. After all, converting fruit and grain into wine, beer, and liquor is a way to protect our rural job base in agriculture from foreign competition. Not only that, but Oregon is known worldwide for our high-quality artisan wine, beer and liquor -- which lifts every export-minded business in Oregon.

So, this item buried deep in a Salem Statesman Journal story caught my eye:

One major concern is the fate of Oregon’s 46 distilleries that produce 12 percent of liquor revenues in the state.

Hood River Distillers lost $4.5 million in revenue — or about 50 percent of sales — after Washington voters approved privatizing liquor sales. Company President Ron Dodge told the Statesman Journal in September that privatizing Oregon’s liquor system could put him out of business.

Why did this happen? With state-run liquor sales, shelf space is protected. But when sales go to grocery stores, they move shelf space to the biggest sellers - which are typically owned by multinational corporations. Local product gets literally bumped off the shelf in favor of the big brands. (And let's be clear: HRD is one of the bigger local producers. They're way better off than the little one- and two-person startup operations.)

Not only that, but I know that local wineries worry that the grocery stores won't expand shelf space for alcohol, they'll just reduce their wine inventories and fill that space with liquor -- hurting our local wine industry too.

What do you think? Is that a realistic worry? Does it matter to you?

By Kari Chisholm Jan. 12, 2014