“Costco bill” signed by governor

OLYMPIA – With the stroke of a pen, out-of-state beer and wine distributors now have the same three ways of getting their products to retailers that domestic producers have.

Dubbed the “Costco bill,” Senate Bill 6823 was sponsored by Sen. Jeanne Kohl-Welles, D-Seattle and signed into law today by Gov. Chris Gregoire.

“This is a win-win solution,” Kohl-Welles said. “Through considerable time and work with the stakeholder groups and with Republican colleagues, we now have a fair and feasible solution. I especially thank Senator Linda Evans Parlette for her outstanding contributions to this process.”

The bill addresses concerns raised by Costco that in-state wineries, breweries and micro-breweries can distribute an unlimited amount of their products through three methods not available to out-of-state producers: 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. Instead, out-of-state producers 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. Without the Legislature passing the bill, and the governor signing it, in-state wineries and breweries could only use distributors, a move that would likely force many smaller operations out of business.

“Washington wines and beers are highly regarded in this country, and have developed devotees around the globe. We did what we needed to do to help keep our smaller beer and wine producers competitive,” Kohl-Welles said.

The law 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.

The law takes effect on April 14.

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