US: Washington's spirits privatisation a "seismic shift" - analysts
Washington officially opened up the sale and distribution of spirits on 1 June
Washington State's privatisation of spirits sales means a "seismic shift" for distillers and could be copied elsehwere in the US, Rabobank analysts believe.
Washington officially opened up the sale and distribution of spirits on 1 June, breaking away from a cluster of US states that have continued to control spirits sales since the 1920s Prohibition era. However, while the move offers opportunities for distributors and wholesalers to expand their businesses, there is potentially a high price to pay for them and spirits firms, warned Rabobank.
Spirits prices will likely have to rise by a fifth in Washington, just to cover extra fees imposed on private operators, they said in a report published late yesterday (7 June).
"The fees applied are necessary to maintain state revenues, but the impact on consumer pricing appears to be coming as a surprise to many voters," the analysts said. This could lead to consumers trading down to cheaper spirits and other drinks categories, they warned.
Other US control states are thought to be considering opening up their markets, the analysts said. They added that spirits suppliers should consider dropping their "neutral" stance to such moves in order to better protect theirW interests.
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