oregon liquor control commissionhistory the oregon liquor control commission (olcc) was created in...
TRANSCRIPT
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Oregon Liquor Control Commission Agency Overview
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Oregon Liquor Control Commission contributes to Oregon’s economy
by fostering business growth, enhancing community livability,
and reinvesting in Oregon
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OLCC oversees the sale of alcoholic beverages to allow access for responsible
adults while protecting public safety
The agency places emphasis on addressing alcohol sales to minors and
visibly intoxicated people
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Rob Patridge Chair
2nd Congressional District
John A. Kitzhaber, MD Governor
Robert Rice Commissioner
1st Congressional District
Vacant Commissioner
4th Congressional District
Pamela Weatherspoon Commissioner
3rd Congressional District
Michael E. Harper, Sr. Commissioner
5th Congressional District
Interim Executive Director
Merle Lindsey
Interim Deputy Director/ Distilled Spirits Director
Brian Flemming
Public Safety Program
Distilled Spirits Program
Support Services Program
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The commissioners are chosen from the five Oregon
congressional districts.
The citizen commissioners help set policy for the OLCC.
They make decisions on issues such as: liquor licenses,
administrative rules, contested case hearings, and
appointments of liquor store operators.
OLCC Commissioners
Pamela Weatherspoon Rob Patridge
Michael Harper, Sr. Robert Rice
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History The Oregon Liquor Control Commission (OLCC) was created in 1933 by a special legislative session after national prohibition ended
The Legislature determined the control system was the best model for serving the community interest and making alcohol legally available to Oregonians
A control system uses a moderate approach by eliminating tactics such as incentives for maximum sales from the marketplace
The state has the exclusive right to sell distilled spirits. Profits from sales are captured at wholesale and retail levels and returned to benefit state and local governments
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OLCC’s Role Advocate responsible alcohol consumption
License all alcohol outlets in Oregon
Issue permits to all trained alcohol servers
Manage/distribute distilled spirits
Regulate businesses that sell/serve alcohol
Generate revenue for essential services like police, education and health care
OLCC is also responsible for the regulation of Oregon’s Bottle Bill
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OLCC Statewide Offices
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Fostering Business Growth
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More than 135,600 Service Permit holders
Mandatory Alcohol Server Education
Oregon was first state to require server education in 1987
Responsible Sales and Service
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12,526 Annual liquor licenses in Oregon, including:
6,861 Restaurants & Bars On-premises licenses
4,515 Grocery/Convenience Stores Off-premises licenses
898 Wineries
238 Brewers/Brew Pubs
196 Distributors/Wholesalers
46 Distilleries
Totals as of Sept. 23, 2013
Oregon is home to…
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Liquor Licensing
Four areas of investigative focus Applicant experience Proposed business operation Compliance and criminal history Local government/community input
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Liquor Licensing Average 67 days total processing time
External factors contribute to 50% of total licensing time
Local government endorsements Applicant responsibilities
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OLCC issues more than 5,000 temporary sales licenses for special events each year
Oregon tourism generated $8.8 Billion in 2011
(Oregon Travel Impacts Report, Dean Runyan Associates)
Special Events Enhance Oregon Tourism
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Oregon’s Beer Industry 238 Brewery/Brewpub Licenses
In 2010, beer-related jobs in Oregon totaled more than 15,000
Related wages exceeded $435 million
Total economic impact of $2.4 billion on Oregon’s economy
(OLCC Licensing Data 2012; Beer Institute Data 2010)
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Oregon’s Wine Industry
898 Oregon Winery Licenses
463 producing wineries
In 2010, wine-related jobs in Oregon totaled over 13,500;
Related wages topped $382 million.
In 2010 wine-related tourism contributed $158.5 million in revenues to the Oregon economy
(The Economic Impact of the Wine and Wine Grape Industries on the Oregon Economy , May 2011, Full Glass Research, OLCC licensing data and 2011 Oregon Winery Census Report)
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Oregon’s Distilled Spirits Industry
46 licensed Oregon distilleries
480 Oregon items available
12% of all liquor sales revenue
Easy entry into marketplace
Level playing field
Custom shipments allow liquor stores to offer local products
Contribute to local economy
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Distillery Retail Liquor Agents
26 distillery agents 32 contract locations Distillers able to sell their own products by the bottle from their tasting room & special events New market opportunity for small businesses
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Distillery outlet at PDX Airport House Spirits currently operating a kiosk at the Portland Airport as a second location Law allows up to 6 total outlets per Oregon Distillery (eff. 1/1/2014) Allows sale of their own products
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Direct sales to consumers from distiller’s tasting room
Expanded special event license criteria to allow distilleries to sell bottles at special events
Modified auction criteria to allow distilled spirits raffles by non-profit groups
Sampling rules updated to allow mixers with liquor for enhanced customer experience
Modernizing laws and requirements allow more options for doing business
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Product Selection
OR carries 1,900 products every day
480 Oregon products OLCC will special order any product that a U.S. manufacturer or importer will ship to Oregon
Approx. 1,200 different items have been special ordered in the last few years
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Liquor Distribution
Actual: 2,676,000 cases sold in FY 2011 2,792,000 cases sold in FY 2012 2,911,000 cases sold in FY 2013
Projection: 3,010,000 cases in 2014 3,132,000 cases in 2015
Breakage in distribution center and in liquor stores is .08%
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Distribution Center2 warehouses 65 FTE 230,000 square feet 3.0 million cases received 2.9 million cases shipped out $497.6 million gross revenue (spirits only) $202.6 million distributions (all sources)
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Liquor theft
Reported liquor theft in Oregon .003% $7,680
(FY 2012)
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From Warehouse to Store
9 private common carriers ship distilled spirits across the state
5 are local Oregon-owned companies More than 13,000 shipments sent from the OLCC warehouse in FY 2013
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Retail Liquor Stores Oregon’s 248 retail liquor stores are run by privately contracted small business owners since the mid 1980’s
Over 1,000 people privately employed by liquor store owners
148 Exclusive Stores
100 Non-Exclusive Stores
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8 store openings 25 relocations 15 remodels 45 new liquor agent appointments 18 new distillery liquor agents
Retail Liquor Store Improvements July 2010 – July 2013
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Improved shopping experience for customers
More convenient locations
Retailers who have made store improvements have seen as much as 53% growth in sales
Oregonliquorsearch.com – for product availability, store hours, directions, and more
Retail Liquor Store Improvements
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Primary business is to sell distilled spirits Sell related items from an approved list such as tobacco, mixers, lottery, stemware
(OAR 845-015-0143)
Typically larger metropolitan communities
Exclusive Stores
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Most operate in conjunction with another business No limit to what types of items they can sell in addition to alcohol Rural communities might have challenges supporting an exclusive store due to a smaller consumer base
Non-Exclusive Stores
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In 2004, the Commissioners approved a pilot project for a liquor store-within-a-store
(OAR 845-015-0199 )
Three stores were approved for the pilot: Lamb’s Thriftway (Portland Garden Home) Ray’s Food Place (West Bend) Bethany QFC (Portland Bethany)
The pilot project ended 2006; Lamb’s Thriftway and Bethany QFC are still open as permanent exclusive stores
Store-within-a-Store
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Earnings from related items sales are limited More staff needed to receive & replenish inventory Individual vs. a corporation as liquor agent
(Now allowed under 2012 rule change)
Challenges for Store-within-a-Store
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Non-exclusive liquor stores in smaller communities where there is a fluctuating, seasonal demand due to tourism or other similar factors (OAR 845-015-0200)
The satellite store is operated by the established liquor agent in that community Two stores currently in program:
Cannon Beach Sunriver
Satellite Stores
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At the March 2012 meeting, Commissioners approved a rule change to allow corporations to apply to be retail sales agents and liquor stores to sell beer and wine For the project, Commissioners approved:
Four existing liquor stores to sell beer and wine (as non-exclusive stores)
Up to four corporations as retail sales agents Commissioners deemed test successful
Program continues No corporations have yet applied for any store openings
(Some interest)
Expanded Opportunities
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Delivery service to licensees Licensees receive 5% discount (per statute) Sales to licensees result in less compensation per bottle Can have higher volume of sales than individual consumer sales
From Liquor Store to Licensee
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Keeping Communities Safe
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OLCC relies on partnerships with law enforcement, local government, licensees, liquor agents and moderation groups to ensure and improve public safety
Reducing alcohol sales to minors & visibly intoxicated people are two of OLCC’s top public safety priorities
Controlled approach to expanding access to liquor stores that sell distilled spirits
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Responsible Vendor Program
First Call Program
Free ID Checking Classes
False Identification Program
Options to purchase Age Verification Equipment
Helping Businesses Be Successful
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In 2010, underage drinking cost Oregonians $659.5 Million
Youth Violence $317.5 Youth Traffic Crashes $71.9 High-Risk Sex $38.1 Youth Property Crime $61.3 Youth Injury $31.9 Poisonings & Psychoses $6.4 Fetal Alcohol Syndrome $11.1 Youth Alcohol Treatment $121.3
The High Price of Underage Drinking
*Pacific Institute for Research and Evaluation (PIRE) with funding from the Office of Juvenile Justice and Delinquency Prevention (OJJDP), 2011
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Fake Identification OLCC inspectors confiscate more
than 1,000 fake IDs each year OLCC inspectors check nearly 6,500 IDs each year OLCC partners with licensees, liquor store owners, universities, and police OLCC offers free ID checking classes on how to identify fake ID
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2012 Fake ID Stats
343 Misrepresentation of age by a minor 56 Using another driver license 20 Misuse of a state ID card 19 Using invalid license 9 Permitting misuse of license 8 Possession of a forged instrument
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Minor Decoy Operations Minor decoy operations are an effort to reduce underage drinking and access to alcohol by minors
During sales checks, a minor volunteer attempts to purchase alcohol from a licensed business to see if staff are checking ID’s correctly Volunteers carry their own legal ID that identifies them as under 21 and do not disguise their age or lie to encourage the sale of alcohol
ORS 471.346 & OAR 845-009-0200 establish uniform standards
Minor photos are bordered in red with “Under 21 until…”
Adult ID
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Minor Decoy Operations
81% of Oregon businesses tested passed OLCC minor sales checks in FY 2012 84% of businesses tested passed in FY 2013 OLCC checks approx. 1,700 licensed businesses each year
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Investing in Oregon
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95% Distilled Spirits
4% Privilege Tax
(Beer and Wine)
<1% License Fees
0.1% Misc. Revenue
Gross Revenue Sources 2011-2013 Biennium
$974.8 Million
$33.3 Million
$9.7 Million $644 Thousand
$1 Billion Total Gross Revenue
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Budget Expenditures 2011-2013 Biennium
OLCC Operations $41.8 Million Credit Card Fees $ 8.3 Million Liquor Agents Compensation $83.2 Million $133.3 Million
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Beer and Wine Tax Revenue
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Fiscal Year
$'s
Wine Tax Malt Beverage Tax
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Ten-Year Forecast of Liquor Sales
$-
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
$700,000,000
$800,000,000
$900,000,000
$1,000,000,000
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
Fiscal Year
Gro
ss S
ales
$'s
Total Sales Revenue Forecast
OLCC expected to exceed
$1 Billion gross revenue in ’13-’15
biennium
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Privilege Tax Wine Tax Beer Tax
Distilled Spirits Mark-up
1983 $0.67/gallon up to 14% ABV $.077/gallon over 14% ABV (but less than 21% ABV)
1983 - Bill passed to increase taxes on wine & dedicate an additional $0.02 tax to the Wine Advisory Board (later
renamed Oregon Wine Board)
1977 $2.60/barrel
$0.65/gallon up to 14% ABV $.077/gallon over 14% ABV (but less than 21% ABV)
1991
2011
2013
2009 OLCC approves temp. $0.50 surcharge/bottle
OLCC extended $0.50 surcharge per bottle thru ’11-’13 biennium OLCC extended $0.50 surcharge per bottle thru ’13-’15 biennium
Mark-up 99% of cost + $1.10 freight
1993 Up to $78.06/case (cost) x2.131 +$1.40 freight Over $78.06/case (cost) x1.798 +1.40 freight
Historical Perspective
1977
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Distilled Spirits Sales Increase
1/3 sales growth from customers buying up
Improving economy
2/3 sales growth from increased volume
Population increase Licensee sales improving Washington border sales
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$0.84 OLCC Operating Expenses 5%
$15.70 Register Price Average bottle price
$1.40 Liquor Store Operator Commission 8.88%
37%
$5.81 Profit for State,
Cities and Counties
49%
$7.65 Manufacturer
Cost
Average Liquor Store Operator Compensation
Includes Enforcement & Licensing functions
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Net Income Distribution (ORS 471.810) 2011-2013 Biennium
$49.1M City Revenue
Sharing
$225.6M General Fund
$70.1M Incorporated
Cities
$16.4M Mental Health, Alcoholism & Drug Services $565K
Oregon Wine Board
$35.1M Counties
$397 Million Total Distributions
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$397 Million for Oregon services such as:
Education Healthcare Police, Fire & Rescue
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OLCC Distributed Revenue
$50,000,000
$75,000,000
$100,000,000
$125,000,000
$150,000,000
$175,000,000
$200,000,000
$225,000,000
$250,000,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Actual Distribution Forecast
$441 Million Projected distribution
For 2013-2015 Biennium
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Liquor Dollars Aged 10 years $1.42 Billion
to Oregon programs, cities & counties (FY 2001-2011)
______________________
$ 767.6 million General Fund
$ 444.5 million
for Oregon Cities
$ 130.5 million for Oregon Counties
$ 73.4 million for Mental Health & Addiction
Services
$ 2.3 million for the Oregon Wine Board
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Looking Forward
10 years projected
$2.25 Billion to Oregon programs,
cities & counties (FY 2012-2021)
_______________
$ 1.2 billion General Fund
$ 723 million for Oregon Cities
$ 212 million
for Oregon Counties
$ 97 million for Mental Health & Addiction Services
$ 3.4 million for the Oregon Wine Board
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