McDonnell to privatize ABC liquor stores?

By Heather Sullivan - bio | email

RICHMOND, VA (WWBT) - Governor-elect Bob McDonnell will be inaugurated Saturday. One of his campaign promises was to privatize the state-run ABC liquor stores. Supporters say it would generate millions of dollars for the state. Opponents fear it could put them out of business.

The Wilder Commission studied privatizing, or selling, the state's ABC liquor stores to private companies. Two state legislators have proposed it in the past. Now Governor-elect McDonnell wants to make it happen.

Virginia currently controls the sale of alcohol by running the state's more than 300 ABC liquor stores.

McDonnell believes selling the stores would raise $500 million for the state, money he'd use primarily to maintain roads and highways.

VCU Business School professor Dr. David Urban agrees it would create more business and money for the state.

"It would probably energize the business community in a couple of different ways," Urban said. "One is we would have more private businesses out there, because all those liquor stores would be private entities."

Could grocery stores that already sell wine and beer get in on the game? That hasn't been determined.

"The issue becomes how far the state wants to go in terms the number of licenses it wants to issue, and how much penetration it wants to make in different retail environments," Urban said.

There are some concerns about the idea. The Virginia Petroleum, Convenience and Grocery Association fears the competition could put some convenience stores out of business.

"Are they going to look to turn these state ABC stores into convenience stores, selling fountain drinks and newspapers and tobacco product and other things that Virginia based small businesses already do?" asked Mike O'Conner, with the VPCGA.

The Retail Merchants Association hopes the stores would not all be sold to one company, creating a monopoly.

And the Virginia Assembly of Independent Baptists fears it will increase alcohol abuse, according to Executive Director Jack Knapp.

"You have DUI problems, you have work related problems, you have problems within the homes," Knapp said. "Alcohol abuse leads to spousal abuse. Alcohol abuse leads to child abuse."

The details as to how McDonnell's proposal would be set up haven't been worked-out yet. He says he'll use a team of experts to do that. McDonnell believes privatization can happen with enhanced enforcement and without increases in alcohol-related problems.

(c) 2010. WWBT, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.