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Proposal To Privatize Liquor Sales Denied

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Staff Writer

During the General Assembly, a proposal was brought up to discontinue the state regulated alcohol sale and open it to private businesses.  This controversial issue was denied and met with much hesitation from both sides.

As of now, Virginia is one of just nine states that sell liquor through state regulated stores; Virginia Alcohol and Beverage Control. 

By privatizing the sale of liquor, as opposed to a state monopoly, politicians argue that this would decrease revenue for the state.  An advocate for the privatization bill, Governor Bob McDonnell, thinks otherwise. 

If the state were to auction licenses to private business so they could legally sell distilled spirits, there is a possible $200 million return for the state. If privatization were to occur, there is an additional revenue increase of $13 million per year. Another benefit to the residents of Virginia would be the decreased markup price on spirits; leveling off at 50% from its current state enforced 69%.

The state’s ABC auction would provide around 1,000 licenses. ABC would be in control of issuing and regulating the licensed businesses and the ABC would still be a state run agency with no limit in power with the exception that there would not be the existing monopoly over the sale of spirits. Obtaining this would be quite possible for small businesses to achieve by setting a standard bid for the license and a four year installment plan. 

David Poole ’13, a Business major, sees both sides of the argument,

“There’s two-fold [argument],” Poole said.  “The [ABC] regulation would be good to have a limit on how much alcohol you can sell. [Privatization] would encourage more small business owner and help boost the economy especially in a recession.”

Privatization of liquor is controversial in the commonwealth, especially with elections closely approaching. Opposition to the privatization bill came from both sides of the House, but it was not an issue solely dependent on political parties;

“It wasn’t a wedge issue between Republican and Democrat; it was a wedge issue within the [Republican] party itself,” said Senator Emmett Hanger.

 Though republicans favor the free-market economy, the conservatives still feel that alcohol regulation is a dangerous issue that should be left under the authority of the state. Other politicians felt that the initial bulk profit from the state sale of licenses was not enough to cover the loss in state received revenue from the state taxable liquor. 

The proposal was brought up rather late in the year and lacked support,

“This [bill] may just be one of those bills that’s going to be a lot more interesting next year,” said Senator Mark Obenshain. 

Though this year’s Assembly of the privatization bill was turned down, primary advocate McDonnell said he will push for the bill next year.