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OLCC proposes 4 more stores in area

Linda Miller has owned Tobacco Outlet in a strip mall along Northeast Division Street in Gresham for 19 years. She sells beer, wine, cigars, cigarettes, some food and soft drinks and boasts of the lowest prices around for filling growlers with craft beer. OUTLOOK PHOTO: QUINTON SMITH - Proposed locations for new OLCC liquor sales licenses include, clockwise from left, the Corbett Country Market on Historic Columbia River Highway, the Tobacco Outlet at 1173 N.E. Division St., Troutdale Mixer Shop, 2705 N.E. 238th Drive, and the Wood Village Walmart, 23500 N.E. Sandy Blvd.

So when she heard that the Oregon Liquor Control Commission wanted to add up to 17 stores in the Portland area, she jumped at the chance to add liquor to her lineup.

“My customers wanted it,” Miller said, taking a break from stocking shelves and managing employees at her busy checkout counter. “We sell age-restricted products, so it works for us.”

She made up a business plan for selling the state’s booze. She got drawings showing how she would make a separate entrance to her store at 1173 N.E. Division St. And late last month the OLCC told Miller she would get one of 14 new state-licensed liquor stores in the Portland metro area.

Four of the additional stores are in East Multnomah County.

Corbett will get its first liquor store — inside the Corbett Country Market. Wood Village will suddenly have two — one inside the massive Walmart Superstore and a second in an empty storefront facing Walmart’s parking lot. Miller’s Tobacco Outlet will be the fourth — to compete with two other Gresham stores — which are each less than a mile away and had $14 million in combined sales last year.

But Fairview will remain booze-less. No one there applied. Same with Damascus, where three businesses sought a license, but all struck out. An application by a Woodburn company for a store in the Troutdale Marketplace also lost out.

The booze business

Oregon has been regulating distilled spirits since 1933. Now, a commission with five appointed members sets policy for a director, staff and statewide distribution system. Oregon is one of 18 such “control” states.OUTLOOK PHOTO: QUINTON SMITH - Tobacco Outlet, 1173 N.E. Division St., Gresham

The state sets prices for the booze, distributes it from a central warehouse to 248 stores run by agents who are independent contractors. The store owners get paid on a sliding-scale commission that generally averages 9 percent.

But the OLCC has been pushed the past 10 years to modernize and expand its system. It has experimented with a more convenient “store within a store” model with minimal success — there are only three independent OLCC outlets inside grocery stores in Oregon.

Washington voters privatized their state liquor business in 2012, fueled by a massive campaign by Costco. The result there, however, has generally been higher prices and fewer choices.

Two attempts to qualify an initiative petition for the Oregon ballot to get the state out of the booze business have failed, the first in 2014. Last week a grocery-store backed group dropped its attempt to gather signatures for another attempt after at least four public opinion polls showed that voters preferred the state-run system.

Three years ago the OLCC allowed liquor stores to apply to also sell beer and wine. And then last year it decided to add more stores in the three-county metro area through an “open recruitment” process.

In the mid 1980s, Oregon had one liquor store for every 12,000 people. The current ratio is 1-to-16,000. The Portland area has 68 stores but because of population growth the ratio is 1-to-25,000. With the 14 new stores, that drops to 1-to-21,000.OUTLOOK PHOTO: QUINTON SMITH - Troutdale Mixer Shop, 2705 N.E. 238th Drive, Suite G, Wood Village

“That’s why we opened up the entire tri-county area to recruitment rather than select smaller areas ourselves,” said Christie Scott, an OLCC spokeswoman. “We wanted them to be really market-driven proposals ... and if we didn’t get a quality application then we’d say ‘No’.”

The agency started the recruitment process last October, making it clear it was seeking new ideas, including putting state-owned liquor on grocery shelves.

Walmart sought and got stores approved for four of its locations, including Wood Village. Scott said the OLCC is still working out details of how the store will handle the booze, but expects Walmart will stock only a small number of popular brands.

Winco started the application process for eight of its Portland-area stores, including the one in Gresham, Scott said but dropped out because of other issues.

“They’re interested in pursuing this in the future, but the timing wasn’t good for them,” Scott said.

Not all happy

Official approval of the new stores is still a ways off.

Each new location will be “posted” with a sign giving people two weeks to send comments to the OLCC. Miller’s Tobacco Outlet posted its notice April 29. The store owner also has to deliver fliers to all businesses within 500 feet. And then cities or local governments — in this case Gresham, Wood Village and Multnomah County — are notified.

Existing OLCC store owners also get a voice. OUTLOOK PHOTO: QUINTON SMITH - Wood Village Walmart, 23500 N.E. Sandy Blvd.

Mark and Lori Klahn, who operate the Gresham Liquor Store on Northeast Burnside Road for their father, Roger, are opposed to the new stores. The Klahns have operated the store for 35 years. Although it’s small, crowded and lacks any new amenities or fixtures, the store still sold almost $7 million in liquor in 2015, according to OLCC records.

“We’re not happy about it, of course,” Lori Klahn said of the proposed new stores. “If we have to change anything we’ll probably bring in higher-end specialty liquors.”

Mark Klahn said they sent in a letter earlier this year because they felt the new store — and the possibility of one in Winco just down the road — was too close.

“I don’t think they can just start putting them everywhere,” he said. “But we’ll wait and see. It’s going to be interesting.”

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