Fees chase Woodburn man from Wash. liquor business
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VANCOUVER, Wash. (AP) — An Oregon man is getting out of the Washington state liquor business after fees drove up his prices and consumers found cheaper booze in chain stores and across the state line.
Don Sidhu had $2.1 million in investor money that he spent on four former state-run liquor stores privatized when the state switched away from a state-operated liquor system this year.
Customers told Sidhu that they would buy their booze at Oregon's lower-priced, state-operated stores, The Columbian reported.
Sidhu apologized to customers for the fees, which in some cases led to prices 22 percent higher than those in Oregon.
"They said, 'Don't be sorry, you're the one who's going to lose your business,'" said Sidhu, a Woodburn, Ore., resident who closed his stores in Kennewick and Kirkland and plans to shutter his remaining two stores in Vancouver some time next month.
Liquor sales in Oregon increased 9.4 percent in October 2012, compared to October 2011. At Oregon's 12 border stores, sales increased by 34 percent.
Compounding the problem is distributors, who in many cases charge smaller stores between 25 percent and 35 percent more than they charge volume discounters like Costco.
"In the old system, everybody in the state paid the same price, and now, if you're not close to a Costco or big box, you're paying a whole lot more for the same product," said John Guadnola of the Washington Beer & Wine Distributors Association. "It's so much cheaper to deliver a truckload to one place and have the customer break it up and deliver it out to the individual stores."
Sidhu isn't alone in facing a quick, devastating business failure in Washington's new free-market liquor sales environment.
Of the 167 former state-run liquor stores that Washington auctioned off, Sidhu estimates only 60 or 70 remain open.
He said he had a disadvantage in being a small store. The lack of volume discounts from distributors, competition from Oregon, and the loss of commercial sales that were a key profit center for the former state-run liquor stores have all contributed to the demise of the former state-run stores.
"I will keep my head high," he said, "and move forward."
This just in: Oppressive taxes hurt business.
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The article doesn't mention Washington State taxes as the reason why their alcohol is so much more expensive than Oregon.
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@Bob McMasterson  They might not state it, but taxes are the reason for the loss of sales. You can get a $25 bottle in Oregon - come to WA and you will pay 35-40 for the same thing.
I was up in WA a few months ago and bought a bottle. What was annoying is that the stores have a posted price but then charge you this huge tax (not normal sales tax) at the register. Once that was added in the Safeway price was about the same as the OR price. Granted, this was Safeway and not a small liquor store. Anyway, the irritating thing about it is that the price was so much higher than was posted. Put me off of buying stuff up there.Â
MAYBE HE SHOULD OPEN A STORE SELLING POT, SUDEFED AND FIRE WORKS. tHEN HE COULD ATTRACT OREGON CUSTOMERS.
I've saved a lot of money by not buying alcohol and suffering the downside of alcoholism-smashed cars, jails, fines, and health issues. The rest of you might think about giving AA a try before your life spins out of control.
@OCJohn  Just because YOU can't handle your liquor, that does not mean that a large part of the population can't. I have drank all my adult life and have never had an alcohol related accident, been to jail or had negative health issues as a result..
PS I voted "NO "
Well. Washington. State. So. Much for that. Bright idea.
The Washington law was written to effectively make the State whole from loss of the liquor business. That results in the State still getting their premium while the locals are left to try to cover their labor and overhead. A very poorly written law. The Costcos of the world can afford to sell at cost or a slight loss because they are getting other business. The small liquor store owner is stuck with the high cost and loss of customers.
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Oregonians should take note. If you want to get Oregon out of the liquor business write the initiative so it simply removes the State from the liquor business. Don't try to sell the concept with the State being made whole. That will only promote the chain grocery and other large store businesses.
Suggestion Sir sell at cost for a year or 2 until the big box store buzz wears off. Perhaps 1 employee pay for product, rent, lights, staff and don't expect to run the thing over cost. Look at it this way how many times is Mark A. Homeowner going to buy a case of Jack Daniels maybe once for the novelty of the buy. Don't spend on anything more than a credit card reader and a broom.
Welcome folks to the Donkey Show that never ends and lives to tax and spend your money even it means a business person that provides jobs goes 'Ba-Bye.' Donkeys do not care and when I was kid, I learned real quick about tax & spend Donkeys while Gov. Tom McCall used to party at our house in Lake Oswego.Â
@boned Do you know everybody and everything or does it just appear that way?
 @I812 I have been around for 60 years and you have no idea how many folks I have associated with over the years. Even my attorney buddy asked me one time how I knew so many people. Work for the gubmint in an enforcement position and you might be surprised. The man that started KGW lived next door - Leroy Smith - and Tom McCall was a newscaster there and then became Governor - yea, it helps to grow up in Lake Oswego. I used to talk to Lennie Wilkins all the time when he ran the Trailblazers and would wave at Danny Glover as a sheriff before I stopped by Mark O. Hatfield's house. Man, I was just a kid when this started and I was just doing my duty as a sheriff and the list goes on and on to include Roddy Piper, Tom Peterson, Dayton Leroy Rogers, Scotty Rowles, Todd Davilla, et al. Kind of hard to make this stuff up and have been in a book...
Sounds like you need to write a book!
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 @HarryJuku He did not need one back then and we always left our doors unlocked and the keys in the car. Those were different times, but you are too young to remember only five channels on a rabbit-eared TV, bias ply tires, vinyl records, no fat people and on, and on, and on when we all had guns and every kid new exactly how to use them thanks to the YMCA/YWCA...
Let the buyer beware applies also to owners who buy stores expecting hugh windfall profits!
 @jpk "expecting hugh(sic) windfall profits?" Apparently you did not read the entire article - lies and subterfuge by WA to garner more taxes that has failed. Now WA plans to reinstate increased taxes on candy, soda, snacks and beer to make-up for their Donkey ineptitude. I forgot, you drive a Saab...Â
Nope! I don't drive anything from SAAB (Svenska Aeroplan Aktiens Bolaget!)Â
When Washington voted this in, they were stupid enough to believe that everyone was going to benefit, when in truth it is on Costco and a few large chains that will make money, dugh who paid for all those ads on TV. People do your research when you vote. This was doomed from day one. And they swallowed this like a bunch of Lemmings.
 @Luckylucy You're right.  It was swallowed by the lemmings.  But the voter's pamphlet, for those who read it, proposed this very issue (ok, it was in the opinion section, but it was still there).  And the Columbian even suggested this when they did their study about it, too.
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FWIW, I voted against it. Â I saw the writing on the wall. Â And I don't drink.
Again !! He claims he had to closed a store in kirkland because....wait for it.....people going across the border to oregon liquor stores......google map kirkland to portland.....
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katu, why did this guy REALLY close his kirkland store....do some REAL investigative reporting katu !
 @sargerator LOL, I have family up there, it is about a 4 hour drive. I agree that it is a bit excessive to believe people would drive to OR just to buy liquor.
This is the market economy at work and while I feel bad for the business owners consumers will vote with their dollars.
LOL. It's $8 fixed bottle tax + variable more on volume, right? Where's the Kennedy Clan market?Â
i bought a 750ml $18.36 bottle in long beach and it cost $24.28 at check out. i bought a 1.75 L bottle of the same stuff for $17.36 at warrenton. now i shop at the warrenton store not that i buy many bottles a year but it costs me less and the major stores are in warrenton except safeway. Washington state is punishing us for voting to privatize the liquor.Â
State of Washington - Soviet Central PLanning would be proud of your 35% liquor tax. Keep up the good work CCCP
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Bought a $20 bottle at costco that rang up at $28 and chance. Freaking unbelievalbe. Â
The problem is not free enterprise or capitalism. It's also not a problem because the state isn't involved in running it. The problem is the state is literally taxing these businesses to death. The solution is for voters to stand up and tell the state to back off. Washington only fixed part of the problem - it needs to finish the job and get the state out of this business.
Sell marijuana.
This is a classic example.
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Lets expand this to country level. If the taxes in one country get too high then companies will move to the other country.
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That is what causes outsourcing.
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Lesson is over for today.
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Once Washington increases the gas tax this will happen at gas stations on the border with Oregon also.
@RalphCramden The combined Federal/State gas tax in Washington is 55.9. The combined Federal/State gas tax in Oregon is 49.4.  When you add in the .03 Multnomah County tax, the current difference is 3.5 cents. It will have to spread a lot more than that to get people to actually drive just for gas prices....
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Current Wa gas tax is $0.375 per gallon versus Or gas tax of $0.30.
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Washington plans on adding another 4.5 percent which, at $3 per gallon will add on another $0.135 per gallon.
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Since federal taxes are the same in both states leave them out for comparison.
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So the difference in a gallon would be $0.33 per gal for OR and $0.51 for WA. On a 15 gallon take that would be $2.70 difference. While it isn't a lot folks will drive across town and spend $3 to save $2.70.
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If they are in Oregon to begin with they will fill up before crossing the border. If it is truck like mine that takes 35 gallons then I could save $5.
 @RalphCramden Ha ha, you think Washington residents are going to hop over the Washington/China border to get vodka and gas, that's quite a hop! border hopping has been around about as long as borders. But, when peeps are prosperous, they often become lazy also. And, many peeps like to support their own community when they can afford it.
 @swimbadÂ
I think you missed the point.
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Just as consumers leave the state to shop in other states for the sole purpose of saving money, companies leave the US to save money on taxes. It is no different and is one of the biggest reasons companies leave the US.
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As for supporting the local community, that is only for the rich and those oblivious to the impending crash of the financial markets.
 @Razor1  @Lost River  @swimbadÂ
Exactly.
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Very few things are made in the US anymore. Companies in the US just contract with Chinese companies to make the products. Even Made In Oregon has stuff from China.
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What will happen is that Chinese companies will cut out the middle man, the US companies, and sell to us directly.
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I just bought 10 Lightening to USB (iPhone 5) cords for $20 directly from a Chinese company. I could have gone through a US company and paid $7 each for the cords but why do that when I can go straight to the source.
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Apple sells them for $20 each. I got 10 from the Chinese company because there is a 50% failure rate. If 5 work and the other 5 don't then I only paid $4 each for the cords which is still 1/5th of the cost from Apple.
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It really is a sad commentary on the US loss of competitiveness. We are not the place that one wants to do business in a competitive world economy. With the highest mean corporate taxes in the world, excessive regulation, unions and high labor costs it pays to move overseas.
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 @RalphCramden  @Lost River  @swimbad Ralph my work uniform was made in china. Army ACUs.
 @Lost River  @swimbadÂ
Just like my cell phone, computer, DVR, LCD TV, most of my car, my new RC helicopter, camera, food processor, microwave and pretty much everything else is made outside the US.
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I don't think that I have anything that was made in the US except part of my vehicles. I went to get some parts for my truck and all were made in Canada or Mexico. Even the tools I used to put the parts in were made in China.
@swimbad @RalphCramden  Yes, the parking lots are full at Walmart and Fred Meyers. Probably 95% of the clothing sold at these two places is brought in from China, Cambodia, Vietnam and Sri Lanka. Any idea why?
 @Bobek  @RalphCramden You and your 5 pts? Good work Ralph!
 @RalphCramden  @swimbad Ralph Cramden for president.
 @swimbadÂ
Wages, taxes, regulations and unions. The 4 horses of the apocalypse as they say.
 @RalphCramden Yer twisted Ralph and I don't feel like educating you today but I will say that I just drove by Fred Meyer and Walmart and the parking lots are full and I didn't see too many limousines, RR and exotic cars. As far as companies that left the US, I thought it was more about wages than taxes, but what do I know?
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I remember the ads saying that there'd be lower prices and no change in the crime rate - what about the increase in shop-lifting from stores like Safeway? At least in the stae run stores there was some control and oh yeah good prices
It's too bad the voters in Washington voted for the measure. A lot of good people lost their jobs.
 @Bdou Exactly...that's why I voted against it...not that it did any good.
@Bdou Most of these jobs were moved to Costco and probably given to part time minimum wage earners who strugggle with the English language and can't tell the difference between bourbon and scotch
@Lost River except Costco pays well above minimum wage. Most of their jobs start in the $11.50-$14/hour range.
 @Bdou The voters pamphlet also suggested this very thing would happen.  Even the Columbian's reporting suggested statistically pretty close to what has been reflected in the "updated" article.  I can't say I'm sorry for the smaller guys.  It was a big box store funded measure and it was aligned in such a fashion that they would be the only ones to profit.
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Sadly, it also means the smaller, more artisanal distilleries and breweries lost their opportunity to produce and sell their products small scale (as they wanted to).
 @Bdou and their businesses.Â
wont be long till they start doing this to dope
Don Sidhu should have loaded his store's with all the single item things that help keep the doors open like "Belly Washers and Tummy Ticklers". I guess he thought he would make it on just booze alone like the old state owned liquor stores did, wrong!