Should We Abolish the OLCC?

In this week's Mercury (hitting the streets this afternoon) I write about the conflicted role of theas both the distributor of alcohol and the regulator of its consumption.

The agency itself is a leftover from the repeal of Prohibition, when a few states were worried about a rapid spread of drunkenness and decided to enforce their own temperance laws and controls on sales. That gave rise to the 19 states that are currently "control states," where a state agency has a monopoly in selling some or all alcoholic beverages. Here, liquor stores are state-run, and the OLCC handles wholesaling of beer and wine to distributors collects taxes on beer and wine sales.

As you may guess, this bothers some people who don't like the state running things. Today's editorial in the Oregonian takes what it calls "a hard look at liquor sales" in Oregon. Editorial page editor Bob "DUII" Caldwell and friends mention, but stop short of endorsing, Chris Dudley's proposal to abolish the OLCC's monopoly on liquor sales. They point to a pair of initiatives that could see the ballot in Washington (another control state) this fall, which would put liquor sales into private hands. Costco is a big backer of that initiative, and began petitioning its shoppers in May.

And on Friday, July 9, Jeff Alworth posted a call to "Kill the OLCC" to his Beervana blog. He draws attention to another recent Oregonian op-ed by vintner William Hatcher that calls for completely dismantling the organization. He also links to a piece by the Bend Bulletin's Nick Budnick about a private audit that found some pretty damning evidence of inefficiencies within the labyrinthine organization.

If the OLCC stops running liquor stores, the state misses out on the markup from hard-liquor sales. But if places like Safeway can sell it, the state can still slap a heavy tax on the stuff.