Liquor prices in Washington state are set to rise, following the approval of 1183 initiative in fall 2011, which allowed liquor sales to stores with an area of more than 10,000ft² and some smaller ones.

Under the initiative, from 1 March 2012, bars and restaurants were allowed to purchase liquor directly from distributors and from 1 June 2012, they will be allowed to purchase liquor from retailers.

The direct purchase is backed by additional 10% distributor fee and 17% retail fee on spirits to reimburse the lost revenue.

Some big-box stores like Costco can negotiate volume discounts for some products or sell their own labels.

Store manager Melody Kennett said big-box stores will be able to negotiate some discounts by ordering in bulk, but the initiative included higher fees to the state for everybody.

"Prices will go up for everybody," Kennett said.

Costco senior vice president and chief legal officer Joel Benoliel said pricing is still in flux for most distributors, wholesalers and retailers, because it’s the first time in 70 years the private parties have been in the liquor business.

"We want to buy cheaply, distribute more cheaply, and take a little shorter margin," Benoliel said.

The current price of 750ml bottle of Absolut Citron Vodka is $22.95 inclusive of all fees and taxes.

According to the new charges, the distributor’s price for the same product will be $18.27 plus 20% markup for retailer to cover costs and make profit, 17% fee to reimburse lost revenue, 20.5% retail sales tax and $2.83 litre tax, which makes the final price as $33.74 per bottle.

Similarly, the price of 151-proof Bacardi Rum will increase from $26.95 per bottle to $34.73.

Distributors also need to pay the state an additional $150m as licensing fee.

Some opponents filed a suit against the initiative and the Washington Supreme Court is yet to take a call on it.