TREASURE VALLEY — Sixteen years.
That's how long three locals waited on Boise's liquor license priority list before their turn came this year to receive one.
Boise has the longest waiting list in Idaho for business owners who want to serve liquor by the glass, Idaho State Police – Alcohol Beverage Control office supervisor Nichole Harvey said.
Alcohol Beverage Control regulates how many liquor licenses are given out in each city based on annual population estimates.
Every city gets at least two licenses and an additional license after that for every 1,500 people.
Parma, a town of about 1,800, is the only Canyon County city with a waiting list, which currently has two people on it, Harvey said.
If the waiting list is too long, business owners can buy or lease a license from someone who obtained one from the state at least two years prior.
But the price on the secondary market is steep. Licenses go for about $140,000 in Boise, compared to the state's law-regulated fee of $750.
“It's really that supply and demand theory — whatever anybody's willing to pay is what it's worth,” Harvey said.
A license is valuable because liquor draws crowds and boosts revenue, R&R Public House co-owner and chef Keith Moreno said.
The Meridian restaurant opened last June but couldn't obtain a liquor license from the state until September.
“It was a night and day difference,” he said. “... More people did come in after they found out we did have liquor. You have specialty cocktails, that helps out. Your profit margins are way higher than beer or wine.”
He estimates that liquor makes up about 30 percent of the company's sales.
If a license wouldn't have become available through the state, Moreno guesses the restaurant would have leased one.
Leasing a liquor license in Boise currently costs around $1,500 a month, Arthur Berry & Company broker Brent Bungard, who works with liquor license transfers, said.
“It's easier to find somebody who is interested is leasing a license because there are less upfront costs associated with that,” he said. “But there are also fewer licenses out there that are available to lease.”
Either way, the liquor license market is a tight one, he said, but people aren't paying as high of prices on the secondary market as they were five years ago, when a license could go for $150,000 or be leased for $2,000.
The poor economy can take some responsibility for the price drop, Bungard said.
“When there are more licenses on the market due to bars and restaurants closing, things like that happening, obviously there's more supply out there and the price drops.”
But still in several Idaho cities — especially touristy place like McCall or Sun Valley that don't see a lot of population increases, Harvey said — sometimes the only way serve liquor without waiting in line for years is to pay the big bucks.
Liquor license demand lower in Canyon County
For restaurants wanting to come to Nampa or Caldwell, obtaining a liquor license shouldn't be a problem if they meet the requirements.
The state has four available licenses in Nampa and nine in Caldwell, Harvey said.
Dillon and Jennifer Wickel opened Indian Creek Steakhouse in Caldwell last fall and obtained a liquor license from the state within 90 days.
To serve liquor, he pays an annual fee of $750 to the state, plus more than $560 per year to the city of Caldwell and about $190 to the county.
Having a liquor license is very important, he said, estimating it makes up about 15 percent of sales. Without one, “you would cut out a lot of people that would come to eat.”
If a license from the state wouldn't have been available, Dillon's not sure they would have opened the restaurant, he said, and they couldn't afford to pay market prices around $80,000.
Should liquor industry be privatized?
This year Washington became the first state to switch from a government regulated to a private liquor industry. It joins 32 other states that don't exercise government control over the industry and haven't since Prohibition ended in the 1930s.
The debate is hot in Idaho as retailers and lobbyists strive to get an initiative on the 2014 ballot to privatize the industry.
“There's a lot more support for this than there is opposition,” The Northwest Grocers Association Idaho lobbyist Roy Eiguren said. “... The polling that our association did in January … showed that 64 percent of those citizens that were polled on this issue supported privatizing the liquor company.”
Those for the privatization say it would:
Make prices more competitive
Washington liquor prices in most stores increased after the privatization, but “once market forces set it, prices will go down, not up,” Eiguren said, estimating that prices will decrease within six to nine months.
Make liquor more accessible to the customer
Longer store hours and larger variety of liquor retailers would make buying liquor more convenient.
Benefit private retailers
In a recent study, Pacific Institute for Research and Evaluation scientist Ted Miller said privatizing the industry would raise liquor sales by 21 percent and total alcohol sales by 5.6 percent, coming from more than 500 retailers.
“The Northwest Grocers Association … has strongly supported the privatization of state owned liquor companies,” Eiguren said.
End the state's monopoly on liquor sales
The private sector is more efficient than the government is in distributing product, Eiguren said.
Those against privatization say it would:
Damage public health
“Consumption in states like Idaho is 20 percent less than the open states. There are fewer alcohol-related deaths, the roadways are safer, … crime is less, there are fewer alcohol-related healthcare issues,” Idaho State Division of Liquor Chief Financial Officer Tony Faraca said.
These and other issues related to privatizing liquor sales could cost Idahoans $195 million a year, Miller's study says.
“Liquor products are far more dangerous than beer or wine products,” Jeremy Pisca, executive director of the Beer and Wine Distributors Association, said. “... Even consuming small quantities, people can get affected and drunk quicker.”
That's the main reason Idaho chose to control the industry all those years ago, he said.
Create easier access for minors
“Kids are in (grocery) facilities all the time,” Pisca said. “With a state-operated liquor store, you never see kids in there, they're not allowed.”
Raise taxes in other areas
Money from the liquor industry goes into the general fund, Faraca said. “If that money were to vanish, they would have to come up with $55 million from some other source. So theoretically taxes would have to go up to offset that.”
Benefit large, out-of-state retailers rather than keeping the money in Idaho
“As state entity, we're basically a nonprofit. If we make $55 million, we keep $55 million, we're not sending a third of it to IRS income tax. All $55 million stays in the state of Idaho,” Faraca said.