Virginia to Sell Off Liquor Stores?

By: Mark Tenia Email
By: Mark Tenia Email

July 21, 2010

The Associated Press reports consensus appears to be developing around a proposal to privatize Virginia's liquor retailing and more than double the number of stores.

Governor Bob McDonnell says liquor offers a solution to the state's budget woes, and if his proposal does go though, customers won't only see liquor in more places, they may also see lower prices and a wider selection.

for decades Virginia has controlled the sale of liquor, one of a handful of states that has not privatized the industry. Gov. McDonnell's policy chief, Eric Finkbeiner, explained four options for selling the state-owned Alcoholic Beverage Control outlets. Finkbeiner said the proposal would increase the number of stores from the current 332 for a state populace of about 8 million to roughly 800 stores. The change would also generate between $300 and $400 million from licenses that will be auctioned off to the highest bidder.

Licenses would be tiered in three groups. The largest would be for large food outlets such as supermarkets. A second level would be for traditional package stores. And a third would apply to small liquor displays in convenience stores or drug stores.

The debate has played out across the Commonwealth for several years about whether to privatize the ABC stores. Proponents say a plan to privatize the stores would lead to many privately run ones opening. More competition could mean better deals and selection for customers.

"It would be fun for us. I don't know if we can personally carry a huge amount, but I think it would be interesting if we could carry some artisanal spirits," said Josh Hunt, owner of Beer Run.

Opponents point out money from selling the stores is a one-time thing. Profits currently go to the state's general fund for things like education. They also think it would have a negative impact on local wine and beer shops.

"I can only see that it would have a negative impact on my business. So, personally for my business, I think it would be a bad idea. There's going to be more competition, and I think it's going to bring in these big box stores that can do some deep discounting," said Robert Harllee, owner of the Market Street Wine Shop.

Many Democratic politicians believe McDonnell is going to face major obstacles and don't expect the measure to pass in the Virginia Senate.

The group studying privatization plans to adopt a formal recommendation next month.

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