Friday, January 16, 2009

Privatization of Virginia ABC Stores

Senator Mark Obenshain (R-Harrisonburg) wants the state to get out of the business of selling alcohol. Don't worry, this is not another anti-alcohol campaign, but a move that would benefit both the consumer and the state. Senator Obenshain intends to introduce a bill that would require Virginia to sell off its 331 liquor stores, otherwise known as ABC (Alcoholic Beverage Control) stores, and move the business to the private sector. The Northern Virginia Daily has the story.
While the finer points are still being worked out, previous studies have found the commonwealth could realize some $700 million in new revenue — or 23 percent of this year’s budget shortfall — every year.

“ABC sales aren’t that impressive,” Obenshain said. Virginia’s stores made a profit of about $104 million last year, roughly equal to the amount of wine and liquor taxes the stores took in.

Taxpayers could do much better by letting the private sector take over, he said.

Farming out the operation of ABC stores was just one of hundreds of recommendations of a 2002 report on government efficiency and effectiveness chaired by former Democratic Gov. L. Douglas Wilder

While not a new idea, this is perhaps an idea whose time has come given current budget hardships. The state would still collect tax revenue from privatized liquor stores, but do away with the overheard such as leases, payroll, and benefits. There's little doubt that private store owners, with profitability in mind, could offer a better selection and a better shopping experience than that currently offered by the stark state-run stores.

See Legislation could help offset Va.'s deficit by turning over liquor stores for the complete Northern Virginia Daily article.

Senator Obenshain has also created a group on Facebook, Virginians for ABC Store Privatization, to help increase awareness of the cause.

Update, January 31: The proposal was killed in committee today. See this update for more information.

5 comments:

  1. I wonder how much one would cost - or possibly even several? Hmmm, stroking chin....

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  2. A shame venture capital isn't flowing as freely as it used to.

    And to agree with Senator Obenshain on anything is weird.

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  3. Hmm, I'm detecting a entrepreneurial theme here. :-)

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  4. About time I made my living out of something I love - strangely telecoms network equipment just doesn't do it for me. ;)

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  5. Then again, the VA ABC stores appear to operate...after accounting for overhead...at an annual net profit of $104 million, all of which is put into the state's coffers. What I can't find in McDonnell's plan is how the loss of this revenue would be defrayed.

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