Cheers! Senate passes ‘Costco bill’ to ease restrictions on putting wine, beer on store shelves

OLYMPIA – That glass of wine and stein of beer will go down easier, thanks to a bill unanimously passed by the state Senate today. Senate Bill 6823 would let out-of-state wineries and breweries get their products to retailers by the same means that in-state producers use.

“This is a win-win solution,” said bill sponsor Sen. Jeanne Kohl-Welles, D-Seattle. “We worked long and hard with all stakeholder groups — and with our Republican colleagues — to craft a bill that treats all parties as fairly as possible.”

Kohl-Welles’ efforts were commended by the ranking Republican member of the Senate Labor, Commerce, Research & Development Committee, which she chairs.

“I think this is the way a piece of legislation should get to the floor for a vote,” said Sen. Linda Evans Parlette, R-Wenatchee. The two senators crafted the compromise that was considered today.

The bill addresses concerns raised by Costco that while in-state wineries, breweries and micro-breweries can distribute an unlimited amount of their products by using a distributor, delivering the product directly to the retailer, or having the retailer arrange for a pickup of the product from the manufacturer, out-of-state producers cannot. Instead, they must use a licensed distributor to get their products to Washington retailers.

The company filed suit in federal court, where the judge ruled in favor of Costco that the state’s law requiring distributors for out-of-state producers is a violation of the U.S. Constitution’s Commerce Clause. The judge stayed the order until April 14 — unless the Legislature takes action, in-state wineries and breweries could only use distributors, a move that would likely force many smaller operations out of business.

“Because the results of the issues being litigated in the Costco suit are an unknown and could affect the way we have these producers do business, and because this is just a 60-day session, we did as much as was necessary to be in compliance with the judge’s orders,” Kohl-Welles said.

The bill also calls for a study to be completed by Dec.15, 2006, to assess how well the new system is working and to consider recommendations from the Washington State Liquor Control Board on the state’s three-tier system for distribution.

If passed by the House and signed by the governor, the bill will give out-of-state wineries and breweries the same three options for getting their products to retailers that in-state producers have:

• • Take the product directly to the retailer;
• Use a distributor; or
• Require a retailer to arrange with a common carrier, such as FedEx or UPS, the pickup and delivery of the product.

“Washington wines and beers are highly regarded in this country, and have developed devotees around the globe,” Kohl-Welles said. “I want to make sure that we do everything possible and prudent to keep them competitive.”

Return to Sen. Kohl-Welles' home page