Oregon border towns see boost in booze sales to Washington

SALEM, Ore. (AP) — Oregon liquor sales surged 35 percent in June at stores near the border with Washington as new regulations in that state took effect north of the Columbia River, Oregon Liquor Control Commission data show.

The numbers back up anecdotal reports that shoppers from Washington have been crossing the border to escape higher liquor prices resulting from an initiative that voters approved last year.

One store in Rainier across the Columbia from Longview, Wash., saw a 60 percent increase in June over the same month in 2011, according to OLCC data obtained by The Associated Press under Oregon's public records law.

Stores in Umatilla and Milton-Freewater — close to the Tri-Cities and Walla Walla in Washington, respectively — reported sales spikes above 50 percent.

Altogether, at 13 liquor stores near the Washington border, revenue was up 35 percent in June, providing Oregon an influx of nearly $870,000 in gross revenue.

Statewide, liquor sales grew by just 12 percent.

The state doesn't track where buyers live, so there's no conclusive proof that the Washington law is driving the influx, but owners of several border stores said their new customers are after lower prices in Oregon.

"We haven't done any advertising to promote it, but word of mouth is getting out there, and we're just continuing to grow," said Paul Babin, owner of State Line Liquor Store at Jantzen Beach in Portland, the first Oregon liquor store along Interstate 5 south of Vancouver, Wash.

The store's nearly $930,000 in June revenue was a 46 percent increase over the same month last year, and much larger than the modest increase Babin saw at his other store, in Southeast Portland. Babin estimates that 80 percent of his business comes from Washington residents, and he now requires an additional shipment of booze each week.

Washington voters last fall approved an initiative taking the state out of the liquor business for the first time since Prohibition. The measure allows large retailers like grocery stores and Costco to sell liquor, but it also imposed an additional 10 percent distributor fee and 17 percent retail fee to replace money the state lost when it shut down its state-run liquor stores. The result was higher prices for consumers at many retail outlets.

Oregon law allows the sale of packaged hard liquor only at stores run by state-contracted agents who are compensated based on their sales. The profits are divided by the state, cities and counties.

Sandi Carlson, assistant manager at the Rainier Liquor Store, said she's heard a lot of "horror stories about Washington's prices," and she doesn't' expect the new customers to disappear.

"A lot of people are stocking up, but I think it will continue this way," Carlson said."

Mike Gowrylow, spokesman for the Washington state Department of Revenue, said Washingtonians who buy liquor or other items in Oregon, where there is no state sales tax, are supposed to pay a "use tax" on their purchases.

"It's bringing back tangible personal property they'd have to pay at the same rate as Washington's sales tax," Gowrylow said.

Consumers are supposed to calculate taxes owed by getting information from the Department of Revenue website, something Gowrylow conceded was difficult to enforce.

"We're not holding our breath that a lot of people will do that," he said.

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Copyright 2012 The Associated Press