Unions sue to block Washington state liquor privatization

SEATTLE (Reuters) - Unions representing 1,000 Washington liquor store workers sued to stop the voter-approved closure of state-run liquor shops set to begin on Thursday.

The lawsuits, which were filed on Tuesday and Wednesday, would also halt the measure, which was backed by retailer Costco and approved by 59 percent of voters, to allow big-box retail outlets and grocery stores to sell hard liquor.

"The unions have workers who will lose their jobs," union attorney Dmitri Iglitzin said.

The unions also contend the initiative violates a state constitutional rule requiring that ballot measures address only one issue or subject.

The initiative, approved on November 9, changed Washington state's wine distribution laws, regulated alcohol advertising, created new franchise protections for liquor distributors and allowed grocery stores to sell liquor.

The ballot measure shattered Washington's record for the largest single-donor contribution for a state initiative, with supporters collecting about $23 million, most of it from Issaquah, Washington-based warehouse store chain Costco.

"We believe that the legal challenge ... filed today by labor unions is without merit and will be turned back by the courts," a liquor privatization initiative coalition said in a statement.

The ballot measure also imposed a 17 percent tax on gross revenues from hard liquor sales, as well as taxing retail sales of hard liquor by spirits distributor licensees anywhere from 10 to 15 percent.

The plan would allow Washington state, which currently has about 330 liquor shops run by the state and contracted vendors, to open the door for about 1,100 additional outlets to sell liquor.

The state-run stores would be closed or sold to private owners under the initiative, which takes effect 30 days after it won a majority of voters' approval.

Other supporters included grocery stores such as Safeway and Trader Joe's and restaurants that could benefit from volume discounts, alcohol storage and delivery discounts.

Calls to Costco, to the Wine & Spirits Wholesalers of America in Washington, D.C., and to Seattle Local UFCW21 and Washington Teamsters Joint Council 28 union representatives were not immediately returned on Wednesday.

(Editing by Mary Slosson, David Bailey and Greg McCune)