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Industry Groups Considering the Privatization of the OLCC

Oregon grocers and convenience store owners are considering a privatization effort in response to the Commission’s announcement that it would consider applications from Oregon liquor stores to carry beer and wine.  The Commission’s decision was based in part on the success of a four store pilot program at which existing liquor stores offered beer and wine.  The Commission may also be trying to give the impression of moving forward after a challenging couple years in which controversy and turnover have marred the agency.

The Commission overseas the operation of nearly 250 privately owned liquor stores across the state.  The stores own and operate the stores, but the OLCC retains title to the distilled spirits until they are sold.  The liquor stores retain a percentage of each sale.

Any talk of privatization in Oregon sits in the shadow of Washington’s mixed results.  Sales of spirits at Oregon liquor stores near the Washington border have spiked since Washington’s privatization and Washington consumers have voiced concerns about the result.  In addition, much of the cost savings of privatization in Washington stemmed from getting state employees that worked at Washington liquor stores off the state payroll.  In Oregon, they are already are–liquor store employees are paid directly by the retail agent and operator of the store.

An privatization effort would need to be well thought out and executed to have any chance at success.  While the OLCC has had its challenges, new OLCC chairman Rob Patridge’s legislative experience and pragmatism could be just what the Commission needed.  Given this backdrop, the selection of the OLCC’s next executive director, a position vacant since Steve Pharo retired last October, could be pivotal in charting the agency’s future direction.