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New Virginia Governor Bob McDonnell is backing a proposal by state
Senator Mark Obenshain that would curtail the state’s retail monopoly
on spirits. Under Obenshain’s plan, Virginia would auction off licenses
to sell spirits to grocery stores and other independent retailers and
limit the role of the state’s Alcoholic Beverage Control (ABC)
department to regulation and enforcement of the beverage alcohol trade.
The bill would allow one retail liquor license per 10,000 people in
any given area and mandate certain distances between spirits retailers
and churches and schools. Wine and beer retailing is already privatized
in Virginia, but the ABC retains a monopoly on spirits dating from the
end of Prohibition.
If Virginia’s 334 ABC stores are eliminated, 600 full-time jobs,
1,500 part-time jobs and an annual contribution of $322 million to
Virginia's general fund will go with them. Proponents of Obenshain’s
plan argue that ongoing spirits sales taxes, the shifting of operating
costs to the private sector and the annual license fees imposed on
retailers will make up the revenue gap. The bill is currently before
Virginia’s Senate Finance Committee.
Privatization has also been raised by some in neighboring North
Carolina of late, including former Charlotte mayor and 2008 Republican
gubernatorial candidate Pat McCrory, although no formal legislation has
made headway. North Carolina’s ABC has been maligned by charges of
corruption in recent months, including excessive payments to
administrators in New Hanover County and the acceptance of a lavish
dinner from Diageo by Mecklenburg County ABC officials. Governor Bev
Perdue has since publicized local ABC board salary data and called on
local boards to adhere to bans on gifts and other ethics controls, in
addition to other ABC reforms sought through her special Budget Reform
and Accountability Commission.
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