A voter-approved initiative proved to be the death knell for a small Coupeville business.

Nearly two years after a voter initiative privatized liquor sales in Washington state, Coupeville Liquor Store will shut its doors in the coming months.

“The writing has been on the wall for quite a while,” said Pam Smith, who has owned Coupeville Liquor Store for more than 18 years. She is planning to close her business sometime in September.

Voters approved Initiative 1183 in November 2011. It pushed the state out of the liquor business.

By the time privatization became effective in June 2102, the state had auctioned off its liquor stores and laid out the regulations that allowed hard liquor to be sold in large retail stores such as Safeway and Walmart in Oak Harbor and Prairie Center in Coupeville.

Only businesses greater than 10,000 square feet in size are able to sell liquor in Washington state, unless someone has one of the licenses that were grandfathered in.

Small contract stores like Smith’s were grandfathered in and allowed to continue selling spirits.

Once liquor became available at large retail stores, Smith said her business rapidly declined. She estimates her business dropped by about 60 percent.

She noted several other barriers that got in the way of her business. Because her shop is so small, she had trouble with distributors and a quirk in the initiative interfered with her ability to sell to restaurants.

Smith said she had several reliable restaurant accounts that provided a steady flow of income for the liquor store. Once the initiative became effective, she was forced to add a 17 percent fee, which is the same fee charged to consumers. Because of that, she said, restaurants went to distributors who didn’t have to tack on such a charge.

Coupeville Liquor Store is the second liquor store on Whidbey Island to close in the wake of privatization.

The liquor store in Oak Harbor closed in late 2012.

Smith opened Coupeville Liquor Store in 1995 and has sold out of its current location for 13 years.

The local liquor store offers unique spirits and sizes that were smaller and more convenient than larger bottles offered at other stores, Smith said.

This past spring the liquor store became a frequent home to baby goats and other animals. One of the employees works at a nearby farm and would bottle-feed the little animals while selling spirits to the community.

Smith has started informing the community that she intends to close her business. She hasn’t announced a date yet or any sale of inventory.  Once her business closes, Smith said she will rent out the building and she plans to keep her liquor license.

After the closure, Smith said she plans to spend more time on the golf course.