Price Changes in Washington Following the 2012 Liquor Privatization: An Update Through 2016 With Comparisons to...

Washington State ended their wholesale and retail monopoly on liquor on June 1, 2012, resulting in a 5-fold increase in liquor outlets in diverse store types. The legislation also included taxes at the wholesale and retail levels. This study seeks to investigate whether prices have changed from 2014 through 2016, as a follow-up to a previous study finding increases in prices from 2012 to 2014, compared to prices in other states.

We developed an index of 68 brands that were popular in Washington in early 2012. Data on final liquor prices (including taxes) in Washington and California were obtained through store visits and online sources between November 2013 and March 2014, and again between April and May 2016 for Washington only. Pricing data for Idaho and Oregon were obtained from the Statistics for Alcohol Management Database over both sampling periods. Primary analyses were conducted on the utmost brands available in the majority of the stores sampled.

Liquor prices in Washington rose an average of 3.9% for 750 ml and 6.5% for 1.75-l containers overall from 2014 to 2016, while bordering states Idaho (+2.9%) and Oregon (+1.5%) experienced smaller increases for 750-ml and declines for 1.75-l containers (Idaho: -2.9%, Oregon: -4.9%). In the analyses of spirits prices in Washington compared to California, prices in California were 24.1% lower for 750-ml containers and 29.6% lower for 1.75-l containers.

Our findings indicate liquor prices in Washington have increased since our 2014 assessment at a larger percentage than prices in the neighboring control states Oregon and Idaho, with varying effects on brands, container sizes, and store types. We demonstrate privatization is associated with a different pattern of prices across store types than seen in California.