As many of you know, Costco threw over $20 million dollars at an initiative to destroy Washington's State-owned liquor business in the Nov. 2011 elections. With numbers like that, it's no wonder Costco won this round, and Washington State liquor stores are set to close in June 2012, putting more people out of work instead of creating new jobs in an era when we could really use them.
Why did Costco do this? Well, like the question, why are we in the Middle East, everybody with a brain knows the answer: oil. But nobody's owning up to it. And we all know why Costco wanted into the liquor business: profits. But in this Seattle Times interview with retiring Costco CEO Jim Sinegal, he sure isn't mentioning money.
Q: You spent $19 million on a voter initiative this year to get the state out of the liquor business. Why?
A: When I tell you this, you're going to say, "This guy is so full of it." But the whole reason we did this is we thought what was happening in this state and some other states was wrong for the consumer.
There was no justification for that type of system — certainly no justification for the state being in the business of selling alcoholic beverages, and no justification for all the price fixing that was going on relative to the distribution — and the consumer was paying the price for that.
As a result, many times when people were traveling to California or Arizona and other places, they were coming back loaded with liquor.
We think our customers expect us to take up the battle on those types of things. I think they expect us to be the consumers' friend; we consider ourselves the consumers' friend. ...
Now, you're not going to get any of your readers to believe that. They're all going to say it's a bunch of crap, but that really was a motivation for doing this thing.
The money he mentions later, when he talks about Costco's plans for the future:
Q: When you look back here in 10 or 15 years, what do you hope to see?
A: I would hope that 10 years from now, Costco would have sales of probably close to twice what they are right now and that they're significantly more profitable and that we have an even bigger presence internationally than we have today, that we have twice as many members shopping with us, and that we have established ourselves as a leading consumer advocate in the countries where we do business.
We think our mere presence in a community lowers the price of goods for everybody, even if they don't shop with us, because competition is a very good thing. Sometimes we moan about competition, but if we didn't have good competitors out there, we would get very lazy and not be a very good company.
Hmmm. Too bad they couldn't have kept Washington State as competition, since it would only make Costco better, no?
Locally, one liquor store is already closing - Waterville's Mitchell's Hardware, Drug, Floral and Liquor, a 113 year-old family owned and operated institution. Owner Dick Steinburg explained the effect of the Costco win on his and other small businesses that depend on liquor sales for their survival:
“The small independent contractors will be seriously hurt by that law,” said Steinburg, who acknowledged that a substantial portion of his business comes from liquor sales. “A huge number of independent contractors just won’t be able to compete against larger stores and chains. My guess is that 60 to 70 percent of small contractors will be closing their doors.”In other related articles, you can read the full text of the bill, and see what other rules and regulations Costco revised for its own gain - not necessarily for the voting populace's well being.