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MailTribune.com
  • Liquor store owners wary of state plans to expand sales locations

  • Bottles of whiskey, vodka and Scotch could pop up on supermarket shelves if Oregon decides to shake off an 80-year habit of selling liquor through state-licensed stores.
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  • Bottles of whiskey, vodka and Scotch could pop up on supermarket shelves if Oregon decides to shake off an 80-year habit of selling liquor through state-licensed stores.
    The Oregon Liquor Control Commission, which celebrates its 80th anniversary in December, has proposed that grocery stores larger than 10,000 square feet be allowed to sell bottles of hard liquor.
    "I'm not excited about the idea and hope it doesn't happen," said Patrick Voris, owner of Ashland Liquors.
    He said he wants the OLCC to consider the proposal carefully so that stores such as his can survive against competition from supermarket chains as well as Walmart and Costco.
    The OLCC already has approved a series of proposals that would allow grocery stores to sell distilled spirits. The proposals will be fleshed out and presented to the Legislature next year.
    Oregon is one of 17 states that buys liquor in bulk. Liquor stores are privately owned and get their distilled spirits from the state, which gives retailers 8.8 percent of sales.
    The OLCC is considering a system that would allow local liquor stores to survive while not stifling the growth of craft distilleries such as Organic Nation of Ashland and Immortal Spirits of Medford.
    "Consumers want more spirits available," said Diane Paulson, owner of Organic Nation. "But this will not be a benefit to us."
    She said the large distillery companies push smaller operations like hers off the shelves.
    "Major brands could undercut us, and we will not be in those stores like Safeway," Paulson said.
    She said small distilleries don't have the money to pay the incentives to get on grocery store shelves.
    Paulson said there are 50 distillers in Oregon, and they want to be part of a solution that satisfies consumers while continuing to promote Oregon-based business. She said 20 distilleries belong to the Oregon Distillers Guild.
    In the U.S., there were 52 distilleries in 2005, but that has grown to more than 500 in 2013, Paulson said.
    The Distillers Guild has recommended the number of stores selling liquor be increased from the current 248 to no more than 300.
    She said local beer and wine operations have been successful in getting on grocery store shelves because they've been around for a long time.
    "Most banks will lend to a brewpub," she said. "They won't lend to a distillery."
    Christie Scott, spokeswoman for the OLCC, said many of the details are still being discussed as to how grocery stores would sell liquor.
    She said liquor bottles could be featured alongside beer and wine bottles, or could be in a separated area in the store, such as the electronics section of a Fred Meyer store.
    She said the OLCC will have a better idea of its proposal for selling liquor at large stores by the middle of December.
    Liquor stores pump $442 million into government coffers, with $5.5 million going to Jackson County alone, said Rob Patridge, chairman of the OLCC and a Medford resident.
    Oregon distilleries contribute 12 percent of the dollars that flow into local governments, he said.
    The OLCC is looking at a hybrid system that would keep the existing liquor stores viable but open up sales to other, large stores, Patridge said.
    He said many liquor stores are not located in convenient areas because the cost to lease space is too high for many owners.
    "A lot of liquor stores are not in Class A locations," he said.
    Liquor sales are growing at 4 or 5 percent a year, so one idea is to allow store owners to keep more of the profits so they can expand into high-rent areas.
    Oregon has the second highest liquor tax in the nation, Patridge said.
    "In order to optimize the revenue for the state and provide consumers with more choices, we need to modify or invest in the current system," Patridge said.
    He said some people have urged an end to state-licensed liquor stores, but Patridge said that is a conversation best left to legislators and voters. Under existing state law, the OLCC is charged with providing liquor to consumers in a safe, secure manner, he said.
    "I think our system works reasonably well for a largely rural state," Patridge said.
    Reach reporter Damian Mann at 541-776-4476 or dmann@mailtribune.com. Follow on Twitter at twitter.com/reporterdm.
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