Sen. Pitches Plan to Privatize Liquor Stores

By Christian Wright Sunday, January 24, 2010

RICHMOND – It would be last call for Virginia’s state-owned liquor stores if a bill proposed by Sen. Mark Obenshain passes.

His proposal, Senate Bill 443, would force the Virginia Department of Alcohol Beverage Control to close its retail operations. Instead, the ABC would auction off “package store” licenses to vendors that wish to sell liquor and other alcoholic beverages for consumption off premises.

“My goal with the bill is to get the state out of the retail business,” said Obenshain, R-Harrisonburg.

Gov. Bob McDonnell voiced his support for closing the ABC stores during his State of the Commonwealth address last week.

“I didn’t run into anybody who thought selling Jack Daniels whiskey or Grey Goose vodka was a core function of government,” McDonnell said.

The move to privatize liquor sales could have a cost.

The ABC contributed $322 million to Virginia’s general fund last year – and $1.5 billion over the past five years.

Of the $322 million, about $75 million went to the Virginia Department of Behavioral Health and Developmental Services, which helps people with substance abuse and other health issues.

The ABC has 334 stores; 315 of them are leased to people who run them for the state agency.

Under SB 443, which was referred Friday to the Senate Finance Committee, the state would continue to tax liquor sales. Obenshain said the sales of the liquor licenses by the ABC should make up for any lost revenue.

“Licenses will be paid annually, based on whatever the market price ABC determines,” Obenshain said.

The bill would allow grocery stores and other independent retailers to compete for and bid on liquor licenses.

“It’s not the intention of this bill to go from the government monopolizing the liquor industry to one store monopolizing it,” Obenshain said. “We’re trying to create competition.”

He said his bill would restrict the location of liquor stores – keeping them a certain distance from churches and schools. Every Virginia locality would have at least one licensed liquor store; however, a locality could not have more than one license for every 10,000 residents.

Closure of the ABC stores would eliminate about 600 full-time jobs and 1,500 part-time jobs. But Obenshain said, “Unemployment will not occur through this bill.” Adult education classes and workforce training would be available for laid-off workers, and some might take early retirement.

ABC said they do not comment on pending legislation.