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State zeroing in on liquor store plan

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By Landmark News Service

The leading proposal to get Virginia out of the liquor business is calling for privatizing retail and wholesale operations, and auctioning licenses to distributors and sellers of spirits.
Under that plan, Virginia could issue 500 to 800 licenses across the state according to a distribution formula, the governor’s senior policy adviser, Eric Finkbeiner, told lobbyists, lawmakers and others at a meeting of the state government reform and restructuring commission.
That would be a marked increase from the 332 Alcoholic Beverage Control stores Virginia now operates.
State Sen. Mary Margaret Whipple, an Arlington Democrat on the commission, finds the prospect of that many liquor stores tough to swallow.
The “grave concerns” that Whipple said she and other Democrats have about privatization could spell doom for Gov. Bob McDonnell’s plan in the Senate, a 40-member chamber in which Democrats hold a two-seat majority.
Privatization of liquor sales and using the proceeds to pay for transportation needs is expected to be a central component of a General Assembly special session McDonnell tentatively plans to call this fall.
The administration estimates that would yield a one-time windfall of $300 million to $500 million. Additional profits could come through periodic fees that licensees would pay to the state, Finkbeiner said.
Licenses would be divided among large retailers, independent shopkeepers and convenience stores, with different prices for each category.
Three other proposals have been discussed by administration officials.
One calls for the state to retain control of retail and wholesale operations and use private retailers to sell spirits on behalf of Virginia. That would not generate up-front transportation money for the state, according to the administration.
Another would sell wholesale and retail rights to a corporate partner. But that would only swap one monopoly for another, Finkbeiner said.
Fully privatizing Virginia Alcoholic Beverage Control would allow the more than 3,000 Virginia stores licensed to sell wine and beer to also market liquor, which state officials acknowledge could lead to an explosion of liquor stores.
Whatever concept is chosen, Finkbeiner said the state will maintain oversight, strengthen enforcement efforts to protect public safety and keep the current separation between producers, wholesalers and retailers.
And localities would retain the ability to object to the issuance of licenses and adopt zoning rules that limit where alcohol can be sold.
“We don’t want to look like some other states where we’ve got a liquor store on every corner and gaudy neon signs,” Finkbeiner told the commission.