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McDonnell Announces ABC Privatization Plan

Wednesday, September 08, 2010

vabcGovernor Bob McDonnell’s office released its recommendation for ABC privatization Wednesday.

 

The governor's senior staff offered the plan at a meeting of the Simplification and Operations Committee of the Governor’s Commission on Government Reform and Restructuring in Richmond. McDonnell’s staff suggests 1,000 retail licenses be auctioned off to the highest bidders, which is expected to provide $500 million to fund the state’s reduced transportation budget.

“This is an opportunity to put half a billion dollars into transportation simply by eliminating an outdated government monopoly,” McDonnell said. “$500 million for roads and rail will mean congestion relief for our citizens. By privatizing ABC, Virginia will join the majority of states in the nation that have long recognized alcohol distribution is not a core function of government.

“Transportation, on the other hand, is a core function and this plan will deliver immediate results for Virginians frustrated by long commutes and stalled construction sites. ABC privatization is one part of the overall solution to our transportation challenges.

“I look forward to working with Republicans and Democrats to privatize ABC, make government more efficient and improve our transportation system.”

The state’s 2011 budget projects $324.2 million to the General Fund from the sale of alcohol in the Commonwealth, and the current proposal for privatization keeps revenues at this level, according to Wednesday’s press release. There is no tax increase included in the proposal, and McDonnell’s staff estimates the state will make an additional $33 million from the sale of the ABC warehouse in Richmond and 19 state-owned outlets.

The licenses will be broken into three categories: 600 licenses for large establishments such as grocery stores; 150 for smaller establishments such as package stores and wine and beer shops; 250 for convenience stores/retail pharmacies.

No single company will be allowed more than 25 percent of licenses within each level. Of the 1,000 licenses, 332 will be guaranteed for areas currently served by an existing ABC outlet, and the rest will be granted based on population density.

The majority of new license holders will be existing stores, and McDonnell’s staff believes Virginians will mostly see new shelves in retail establishments rather than new stores.

The wholesale portion of the state’s management of the process will also be privatized, “allowing the Commonwealth to completely focus on law enforcement and regulation of distilled spirits,” according to the press release.

The number of ABC enforcement agents will be increased by 25 percent in McDonnell’s plan, and the state, through the ABC board, will maintain health, safety, law enforcement and marketing regulatory authority over private distilled spirit sales and distribution.

View the presentation to the committee on the state website. The committee will vote later this month on the proposal, and the full Commission will consider it on October 4.

Comments  

 
+1 #10 Guest 2010-09-09 19:48
There are other states like Virginia, Pennsylvania, (OK they are both commonwealths), and they are also so archaic. This is a great idea that will likely make a few selfish and self centered and/or opportunistic people wealthy, but in the end the state has ZERO business being in this business.
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+5 #9 Guest 2010-09-09 11:55
Fruit Loops with Rum

4 oz. Fruit Loops
2 oz. Favorite Rum

Heat rum very carefully in medium sauce pan. When rum is very warm pour over bowl containing Fruit Loops. Light with flame of your choice and serve. Extinguish flame with plate after 15 seconds and before eating.
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-2 #8 Guest 2010-09-09 08:19
This idea may have something for everyone. $500 million to be doled out by politicians to carefully selected deserving recipients. That's the kind of forward thinking used when Doug Wilder saved the Commonwealth's budget with a privatization of Blue Cross, and look how well that's worked out. Some states have a long history of private liquor sales. It seems to work OK in the great state of New Jersey... especially in the northern half of the state.
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+8 #7 Guest 2010-09-09 08:13
What a great idea. We should have done this a long time ago. Besides there is only a limited number of licenses available.
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+12 #6 Guest 2010-09-09 08:11
It's about time. I am so sick of Virginia's archaic approach to liquor stores. Prohibition is long over (thank goodness) and it's time to move on. Running retail liquor stores is the last thing the state should be doing. I, for one, am looking forward to a better selection and pricing.
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+10 #5 Guest 2010-09-09 07:48
Dana: Moderate daily intake of liquor has been proven to have many health benefits.

Froot Loops, however, are garbage - empty calories that rob kids of healthy breakfast nutrition and promote tooth decay. But they are packaged in bright colored boxes with friendly cartoon characters, aimed at luring kids into wanting them. Behold, the Devil masquerades as and Angel of Light!

Do we really need the devil's child-destroyin g lures sitting on the shelf next to our nice liquor?
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+7 #4 Guest 2010-09-09 07:47
No, Drew...alas, Dana was probably serious. After all, I was recently told that the devil resided in my iTouch! Mine!
As for the question at hand, generally businesses are best run by business people, not bureaucrats. So this will probably be a good thing in the long run.
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+11 #3 Guest 2010-09-09 06:50
After thinking and pondering off and on about this Virginia topic for years, I'm glad that, finally, our Governor is asking for advice from many and considering the privitization of our State's ABC stores! The entire conversion has to be carefully thought out...really! :-)
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+16 #2 Guest 2010-09-09 06:39
Dana you are kidding right??!!
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-35 #1 Guest 2010-09-08 16:39
The governor is chasing the almighty dollar.

Licenses for grocery stores? So deviants will be buying their demon rum next to where my daughter picks out Froot Loops?

I don't think so.

Do we really need the devil advertising his lures in front of our children?
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