High-Stakes Talks Between Grocers and the Beer and Wine Lobby Collapse

For years, Oregon grocers have yearned to sell bottles of liquor. But in behind-the-scenes talks, grocers have been negotiating with the beer and wine lobby about setting aside that dream, in exchange for placing canned cocktails on Oregon grocery shelves.

Last month, those negotiations failed.

The parties to the negotiation, the Northwest Grocery Association and the Oregon Beer and Wine Distributors Association, blame each other for the breakdown.

It’s too late for the grocers to try to put a measure on the 2024 ballot that would privatize some functions of the Oregon Liquor and Cannabis Commission. But the failure of the canned cocktail compromise makes a future ballot measure much more likely.

HOW DID WE GET HERE?

Oregon remains one of 18 states in which government agencies control liquor sales. Ever since Washington voted to privatize liquor sales in 2011, the issue has bubbled in Oregon.

Groceries are mostly perishable and yield thin profit margins. Liquor lasts nearly forever and is much more profitable. The Northwest Grocery Association, which led the charge for privatization in Washington, has tried to get on the Oregon ballot twice in the past decade. The group appeared poised to target the scandal-weakened OLCC in 2024 before executive director Amanda Dalton halted the process in October. Instead, Dalton sat down with an unlikely ally: Danelle Romain, executive director of the Oregon Beer and Wine Distributors Association. The two cooperated during the 2023 session to pass a self-serve gasoline bill (Romain represented gas station owners). That cooperation rolled into negotiations this fall.

WHAT WAS ON THE TABLE?

Each had something the other wanted.

Dalton’s clients sought access to the hottest product in the alcohol market—cocktails in a can, which the industry calls RTD (for ready to drink). While sales volume of beer, wine and spirits have flatlined or declined slightly post-pandemic, sales of pre-made cocktails soared 60% nationally last year, albeit from a modest base. But because of Oregon’s tight liquor laws, grocers can only sell canned cocktails made from malt beverages—such as White Claw—while those made with a distilled spirits base, such as tequila or vodka, can only be sold through state liquor stores.

“Oregon law classifies something based on what it’s made from and not what the final alcohol by volume is,” OLCC spokesman Mark Pettinger says. “If the ready-to-drink cocktail has distilled liquor in it, then it’s a distilled liquor product, regardless of ABV.”

Romain’s group contemplated joining the grocers in lobbying for legislation allowing grocers to sell liquor-based canned cocktails. In exchange, grocers would agree not to push a privatization ballot measure until at least 2030.

WHY DID THE TALKS FAIL?

That’s where the stories diverge. The grocers say the distributors changed their minds. “After a few months of negotiations and tough conversations with our board, we did offer—and believe was accepted by the distributors—an agreement to stand down on the 2024, 2026 and 2028 general election ballots,” Dalton says. “But in December, the distributors essentially said six years wasn’t enough, killing the agreement but delaying enough to prevent any opportunity for the grocers to seriously pursue a privatization effort in 2024.”

The distributors disagree, noting that the grocers had already decided not to seek a 2024 ballot measure. “It became clear that the grocers were unwilling to negotiate on the length of a moratorium,” Romain says. “Ms. Dalton’s aggressive and unfounded assertion…that we had agreed to their initial proposal to extend their moratorium for only two additional election cycles was both surprising and illogical.”

WHY SHOULD OREGONIANS CARE?

The state’s relationship with alcohol is complicated. Oregonians have among the highest rates of alcohol abuse in the country, and more Oregonians still die from alcohol-related causes than from drug overdoses. The Oregon Health Authority wants to reduce the harm alcohol causes. But lawmakers depend on liquor revenues—it’s the third-largest source of state revenue.

Meanwhile, Americans in most states, including California and Washington, buy their liquor where they buy their groceries—and they buy their White Claw and High Noon canned margaritas in the same place.

Dalton says Oregonians should look forward to buying everything in one location. “This unfortunate exercise,” she says, “has led to some valuable lessons for the grocers and fueled our focus on pursuing full privatization at our earliest opportunity.”