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Virginia should keep ABC stores

When Governor Bob McDonnell was elected he faced two challenges. First, he had to live up to his promise not to raise taxes and second he had to find more money for roads. Given the state of the economy, this is a tough challenge. One of his ideas was to privatize the state liquor stores. This would bring an instant infusion of cash into the state coffers. The approach that’s gaining steam is to have the state close its Alcohol Beverage Control (ABC) stores, and instead, sell licenses to private vendors.

There is one ABC store in King George County, another at Colonial Beach in Westmoreland County, and two in Fredericksburg.  If you’re 21 or older, you can buy all sorts of hard liquor. Beer and wine, on the other hand, are sold through regular commercial outlets such as grocery and convenience stores.
To some, particularly from states where there are numerous commercially owned liquor stores and where liquor is even sold at grocery stores, Virginia’s system of ABC stores seems like a throwback to the days of the Anti-Saloon league and prohibition. And to a point they’re right. Virginia’s handling of liquor sales has always represented a complex relationship, but I don’t know if it’s a bad one.
Prohibition on a nationwide level began in 1920. But Virginia got a head start and in 1916 passed a referendum of its own establishing statewide prohibition. However, just as it proved for the rest of the country, it was a massive failure. “Rum Runners” brought in illegal liquor all up and down Virginia’s extensive coastline.  Even including, or so I’ve been told, several spots in the Northern Neck.  And of course, the state’s moonshiners - distilling the clear brew has a long tradition in the Old Dominion - did a booming business.
However, when prohibition ended in 1932, and the country was “wet” again, Virginia was still conservative, Southern, religious, and not anxious to open the tap completely on hard liquor sales. While prohibition had failed, hard liquor was still seen as the cause of a host of societal problems and if the state couldn’t stop its sales, then at least they could manage its distribution. Also, and Virginia has always been a practical state, it offered a revenue stream as well.
Call me old fashioned, or a Bible pounding religious fanatic, but I don’t feel comfortable expanding liquor sales in the commonwealth. Currently Virginia has 332 ABC stores. Under some versions of the privatization plans being floated, the number of licenses could be as high as 500 to 800. To me, that’s outrageous.  Somehow, given our society’s problems with alcohol abuse, abuse of alcohol by young people and drinking and driving, expanding the number of liquor outlets seems like a bad idea.
Then there is the finance of the situation. The initial surge of cash could be as high as $500 million. That could build a lot of roads. That’s what Governor McDonnell wants. However, last year Virginia made $113 million in clear profit from its liquor stores. Not bad, and before I am sold on the idea of giving up this revenue stream, I think the governor owes us a better business case. Something, that at least from the numbers I’ve seen, doesn’t appear to be there. It’s also worth noting that both Mark Warner and Tim Kaine considered privatizing the state’s liquor business. But nothing came of it.
Privatizing liquor sales in the commonwealth, on the surface, sounds like a good idea, but for reasons both societal and financial, maybe Virginia should stay in the liquor business after all.  It may seem a bit strange, but given the ebb and flow in our relationship with alcohol, maybe it’s a sound middle ground to stay on.
You may reach David Kerr
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