As a 47 plus year veteran of the Alcoholic Beverage Industry, I strongly believe the best direction for the State of Virginia and the consumer is privatization [“Absolute profit?” August 24]. However, the plan put forth by the Governor is a poor one.
The alcoholic beverage industry works best in an open competitive market. For those who think it is full of corruption, for every two incidents in an open market, I can show you one in a control market. The core of the industry is professional retailers who specialize in the sale of all types of alcoholic beverages and derive 70 percent or more of the revenue from those items. They are well versed on the law, realize the value of their license, so are generally very cautious in not selling to an under-aged or inebriated patron. They are also well versed in their products and can offer the consumer good product information. Rarely is that the case with chain store or State ABC employees. And most states limit the number of licenses to an individual or corporate entity to keep the playing field level.
In an open state with the population of Virginia, you would find about 2200 “off-premise” licenses to sell alcoholic beverages. The Governor’s proposal of 1,000 is ridiculous! 1,500 to 1,800 should be the starting number of licenses issued. If he fears a back lash from the “anti’s,” I am at a total loss why he would market this plan with the concept of building roads. We in the industry well know alcohol and moving vehicles do not mix. Roads should be built with taxes on gasoline, not liquor, especially in a state that hasn’t seen a gas tax increase in 24 years.
And speaking of taxes, what does the Governor think of a 70 percent mark-up on spirits is? It is a tax! He is going to replace it with a $17.50 per gallon tax, that is, $3.50 per 750 bottle. If the state is buying a bottle of X for $10, they now sell it for $17. Under his proposal, X becomes $13.50, but the distributor will mark up the tax, so it goes to the retailer at $14.50, who will sell it for $18.99. There is no advantage to the consumer under his plan.
If Virginia wants to stay in the liquor business, there are control states they should model after. Take the time to really research the industry and do it right the first time.
Stanley R. Rose
Albemarle County