What Washington Retailers and Producers Say about the Three-Tier System and the Costco Lawsuit

The current system in Washington State for regulating the sale of beer and wine is working for consumers and businesses alike. Customers have access to a large assortment of products from a variety of retailers at a competitive price. Small breweries and wineries have access to the marketplace and can compete effectively with large producers. The system prevents large retailers from dominating the market and provides smaller retailers with access to a full range of products so they can offer their customers the beer and wine of their choosing.

If Costco were to succeed in dismantling Washington’s 70-year old regulatory system for wine and beer, Costco, Wal-Mart and other big chain stores would be the winners. Consumers would lose out on choice, and Washington’s small producers and retailers would lose the level playing field that helps them compete.

Signed by:

1. Maryanne and Gene Bliesner, owners of Snipes Mountain Brewing (Sunnyside)
2. Lonnie and Barbara Schott, owners of The Grape Escape (Bellevue)
3. Chuck LeFevre, owner of Esquin Wine Merchants (Seattle)
4. David Huse, owner of Five Star Cellars (Walla Walla)
5. Kristen Panagos, co-owner of HY IU HEE HEE (Gig Harbor)
6. Tom Teland, owner of That’s-a-some Italian (Poulsbo)
7. Steve Garguile, owner of Garguiles Red Apple (Bremerton)
8. Dorothy Harris, site manager of Burwell 76 (Bremerton)
9. Devin Moe, owner of the Central Valley Store (Bremerton)
10. Fred Grant, owner of Southworth Grocery (Port Orchard)
11. Larry Springer, owner of the Grape Choice (Kirkland)
12. Kristen Panagos, co-owner of HY IU HEE HEE (Port Orchard)
13. Rich Herdman, owner of R&H Market (Bremerton)
14. Rick Cormier, inventory control clerk at Safeway (Belfair)
15. Tom Aydelotte, owner of Doc’s Marina Grill (Bainbridge Island)
16. Dan Milovich, owner of Gorst Gas and Sheridan Mini-mart (Bremerton)
17. Surjit Basi, owner of 7-11 (Port Orchard)
18. Mike Cook, inventory control clerk at Safeway (Port Orchard)
19. Tim Garguile, owner of the Red Apple Market (Silverdale)
20. Kevin Yoo, executive director of Korean American Grocers Association (KAGRO represents 900+ retail stores in Washington)
21. Mark & Dorene Hunter, owners of Good Guys Food Marts (Walla Walla)
22. Don Clester, owner of the General Store (Dayton)
23. Todd Wagner, manager of the Dayton Mercantile (Dayton)
24. Greg Loney, owner of Loney’s Harvest Foods (Walla Walla)
25. Kirk Maynard, co-owner of Maxi-Mini Market (Aberdeen)
26. Roger St. George, owner of three 7-11s (Aberdeen & Hoquiam)
27. Joe Veloni, owner of the Ace of Clubs Tavern (Hoquaim)
28. Obie Vanchu, owner of Poppa’s Pub (Kent)
29. Chuck Morefield, owner and president of Riverside Family Foods (Chattaroy)
30. Jeb Bowell, owner of the Suncrest Super Market (Nine Mile Falls)
31. Chuck Winn, owner of Sid’s Market (Seaview)
32. Patrick Hub, manager of Olympic Wine Merchant (Olympia)
33. Jim and Mary Jones, co-owners of The Wine Loft (Olympia)
34. John and Louise Rauner, owners of Yakima River Winery (Prosser)
35. Mike Orlando, owner of DeVine Wines (Mill Creek)
36. Lori Newby, owner of Corkscrew Cellars (Puyallup)
37. Jeff Benson, owner of Olympic Wine Brokers (Poulsbo)
38. Candi Bachtell, owner of Savory Faire Café & Wine Shop (Montesano)
39. Cassie Rothstrom, owner of Walla Walla Wine Club (Walla Walla)
40. Aaron Merkatz, owner of The Wineshop and Winebar on 24th (Seattle)
41. Mark Fitzgerald, owner of Fitzgerald's Fine Wines (Camas)
42. Allison Helfen, owner of The Wine Alley (Renton)

"Smaller breweries and smaller wineries tend to benefit from Washington’s current three-tier system as it provides an established network to market and distribute their products. It would be logistically difficult for smaller producers to duplicate that network on their own, and the cost could be prohibitive. Further, the three-tier system’s prohibits larger retailers from using their huge purchasing volume to wring price concessions and other special terms from smaller breweries and wineries, which helps these small businesses keep their prices at a level that is profitable.

Consumers benefits from the three-tier system, too. If the three-tier system were eliminated and out-of-state producers could sell directly to retailers – something in-state producers can do now – I think consumers would find far fewer choices on the shelf."

"People love the variety of wines they find in my store. Without the three-tier system, I wouldn't be able to offer the same great selection nor would small wineries be able to place their wines as freely into the market. One of the reasons my business is successful is the three-tier system creates a level playing field that helps me compete on price and focus on my niche: selection and service. Ultimately, consumers benefit more from the current system than they would if the business rules were to change."

Mike Orlando, owner of deVine Wine Shop
Mill Creek, Washington

"Our winery owes much of its success to our distributors and the awareness and demand they helped create for our wines. I'm a firm believer that the three-tier system is one of the most effective ways wineries of all sizes have to get their products before the buying public and am deeply opposed to Costco's current efforts to dismantle a system that has played such a crucial role in the growth of Yakima Valley's celebrated wine region."

John & Louise Rauner, owners of the Yakima River Winery
Prosser, Washington

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