At today’s regularly scheduled Oregon Liquor and Cannabis Commission (OLCC) meeting, commissioners voted to oppose the privatization of cocktails in a can. The proposal to privatize these beverages has recently been circulated to state legislators by the Northwest Grocery Retail Association in conjunction with a small group of distillers.
“This proposal makes a false promise of new funding based on flawed economics. There is no new money. Privatizing cocktails in a can would lead to less revenue and higher costs for our communities, narrow the choices of Oregon consumers, and undermine public health and safety by increasing the chance that minors will gain access to these liquor products” said Oregon Liquor and Cannabis Commission (OLCC) Chair Dennis Doherty.
The Commissioners’ opposition was based on the analysis presented at the October commission meeting by OLCC staff. In their presentation, staff highlighted the following findings:
- Between 2020 and 2025, Oregon’s way of distributing and selling cocktails in a can raised $11.4 million for communities across the state. Over this same time, privatizing cocktails in a can would only have raised $7.7 million. That is a 32% decrease and a loss of $3.7 million to fund things that Oregonians care about, including parks, schools, public safety, and drug and alcohol treatment.
- Privatizing cocktails in a can would increased administrative costs. Specifically, administering the new tax would necessitate upgrading the OLCC’s online privilege tax system at a cost of approximately $1.25 million. Further, OLCC would need additional staff to implement and oversee the new tax collection which could cost $660,000 over the next two years.
- The privatization proposal assumes a 180% volume increase in the first year. Oregonians would have to drink an additional 5.2 million cocktails in a can to realize this increase. This is unrealistic given current market trends and consumption patterns. Pennsylvania, which privatized cocktails in a can in 2024, only saw a 7% increase in sales and a 15% increase in volume sold.
- While the market share of canned cocktails has continued to increase, this growth has slowed significantly since its pandemic peak. There are also clear indications that the market is saturated. As the market has grown, more national manufacturers have entered and have started to crowd Oregon-based distillers out. Privatization would further accelerate this trend as larger manufacturers would push local distillers off store shelves.
- Alcohol consumption continues to decline. The percentage of U.S. adults who say they consume alcohol has fallen to 54%, a record low in polling on this issue. In this environment, it is highly unlikely that increased sales of canned cocktails will add to the overall sales of alcohol products. What is more likely is that canned cocktail consumers will buy less beer or wine, including those produced in Oregon.
- Oregon liquor stores responsibly provide adult’s access to distilled spirits. Privatization would dispense with this protection as grocery stores lack controlled entry and age-restricted areas. As a result, it would be easier for minors to gain access to cocktails in a can, endangering their health and safety.
In addition to the formal vote of opposition, Commissioners requested that Commission Chair Dennis Doherty send a letter to legislators outlining the Commission’s opposition. Commissioners also directed OLCC staff to prepare a comprehensive analysis of the revenue and cost impacts of privatization for presentation at a future commission meeting.
