Tuesday, November 15, 2011

Who has the lowest liquor prices?

by Christie Scott

You may have heard some say that liquor is cheaper in California. The facts are that only a handful of products are significantly lower, while most products are very competitive. In fact, after you’ve added in the California sales tax, many popular products in Oregon are actually less expensive.

Many retail stores in states like California use a sales tactic called “loss leaders.” This is the practice of drastically marking down a few popular, fast-moving products to entice customers into coming into the store and purchasing other products. But then other products are likely marked higher to make up the cost difference.

The OLCC does not use these techniques to entice people into liquor stores. For public safety reasons, the state does not try to encourage alcohol sales or try to entice people into the stores.

The most common size bottle sold in Oregon is 750 ml also known as "fifths." Most people who purchase alcohol purchase this size - and this is the size where Oregon is the most competitive.

We took the advertised prices from a popular grocery chain and liquor store in California (including their sales tax) and compared them to Oregon. The price comparison showed that the final cost of a "fifth" of Smirnoff Vodka in Oregon was $12.95. In California, the final price (including sales tax) was $15.21. Another popular brand, Bailey’s Irish Cream, was $21.95 in Oregon - the average price, including tax, was $23.92 in California.

In a 2010 study, there were many brands in which the Oregon price was lower than California ’s: Bacardi, Jack Daniels, Seagrams, Jose Cuervo and Hennessy - just to name a few.

Many products were pretty comparable. For example, in Oregon you can buy a “fifth” of Captain Morgan for $18.48 - it’s $19.02 for the Captain south of the Oregon border. Skyy Vodka is currently $21.99 at Oregon liquor stores and you can buy it for about $19.57 in California.

So, for most prices Oregon is very competitive. However, there is one area where prices may be higher. Other states often price the half gallons/gallons of alcohol cheaper than they are here in Oregon. Oregon’s sales data shows that there aren’t as many people buying liquor in large sizes for their personal use. Oregon liquor stores do carry the larger sizes, but the most frequently purchased size remains the “fifth.”

Oregon will not compete for lower prices of the larger sized liquors. The Oregon Constitution has charged the state with “…the promotion of temperance in the use and consumption of alcoholic beverages, encourage the use and consumption of lighter beverages…”

Friday, November 4, 2011

Oregon is a good state for local distillers

Remember the 70’s when Oregon wineries were just getting their foothold in the market?  And do you recall the boom of the Oregon brewers back in the 90’s? Now, the prosperity of Oregon entrepreneurs is shining on the distillery industry. 
OLCC has licensed more than 40 Oregon distilleries and the number is growing. Our unique Oregon culture promotes a positive environment for craft distilleries. For example, a distillery license in Oregon costs only $100. Another benefit is that distillers do not have to "buy shelf space" to get their product into stores. Because the OLCC treats all products equally – there are no extra fees that local distillers have to pay to get their products on the shelves of liquor stores.

The OLCC warehouse has a unique system for getting new and local products into the market. We refer to this area as “Re-pack.” The OLCC warehouse will break up a full case of liquor to allow stores to place partial case orders. Liquor stores don't need to fill their stock rooms with a full case of each product. They can order just one or two bottles to see how well it sells.   

There have been several recent law changes that benefit Oregon distillers. Distillers can now offer tastings (small samples of product), or sell their products by the glass at a restaurant at their distillery or another location. Another law allows distilled spirits tastings at liquor stores to now include mixers – which helps customers know how they would use the product at home. 

Oregon distillers can also apply to be "distillery agents" so that they can sell their product from the distillery or tasting room. Over half the distilleries in Oregon are also distillery agents.

The OLCC takes pride in helping to establish responsible businesses in our state, and in helping Oregon become a leader in the nation for the burgeoning craft distillery industry.