Hope for those in liquor control states?

[jburlowski]

Looks like a number of states are at least considering getting out of the liquor business:

"Liquor sales just don't fall under the category of top government functions to be providing to the taxpayers..."

[Old Lamplighter]

For all my friends in AL, MS and PA that would be good news indeed.

[ratcheer]

For all my friends in AL, MS and PA that would be good news indeed.

The devil is in the details.

Tim

[BourbonJoe]

PA would never consider that. I remember when Governor Thornberg tried it and got badly shot down by the PALCB union, especially. Not only are they stupid but they're union.
Joe

[cigarnv]

Certainly hope Virginia heads in this direction....

[loose proton]

The devil is in the details.

That's for sure. Virginia may now have the highest tax in the country (definitely in top 4) since we had a recent increase, and one proposition is for Virginia to go out of retail but still control wholesale and importation into the state. One plan is to sell franchises so retailers would have a huge initial startup cost added to the already high cost of starting a biz and putting in inventory. Because of current price structuring, it may be that the price of bottom shelf stuff would increase and selection would go down. The only hope is if some of the big retailers move into Virginia with big bucks. But, that means some of the plan for increased revenues may be lost because (though Virginia would still get sales, liquor, and income tax) profit $$ would get spent in other states and go out of state's economy. And, there may be a net job loss. It all depends on what plan actually gets instituted. If done properly, it could be a benefit for the consumer and could increase revenues for the state.

[ratcheer]

... and one proposition is for Virginia to go out of retail but still control wholesale and importation into the state. One plan is to sell franchises so retailers would have a huge initial startup cost added to the already high cost of starting a biz and putting in inventory. Because of current price structuring, it may be that the price of bottom shelf stuff would increase and selection would go down.

While Alabama's main retail outlets remain the state run ABC stores, some years back they also started allowing private retail operations. As best as I can understand it, these private retailers must purchase from the ABC at the full ABC retail price, then add any markup they can get to that.

A year or so ago, I went into one of those stores just to see what it was like. I saw a bottle of Blanton's, which I rarely see on the ABC stores' shelves, anymore. It was priced at slightly over $100! I have no idea how they can make a living at those kinds of prices or who their customers are. Certainly not I.

Tim

[cowdery]

The devil is in the details.

Tim

So true. Ohio is still a control state even though it switched to an "agency" system and no longer operates the retail stores itself. It does, however, set minimum prices and controls what its agents can buy. License states such as Illinois and Kentucky exert a lot of control too, relative to other types of consumer products. Many license states fix minimum prices and hours of operation. Through licensing it is the state, and not the market, that determines the number of retail outlets for beverage alcohol. In every state, the government is all up in the booze business.

[sailor22]

A year or so ago, I went into one of those stores just to see what it was like. I saw a bottle of Blanton's, which I rarely see on the ABC stores' shelves, anymore. It was priced at slightly over $100! I have no idea how they can make a living at those kinds of prices or who their customers are. Certainly not I.

Two years ago I stopped in a small liquor store in Alabama - on 231 between I-10 and Dothan - they had two Blanton's on the shelf for $32 each, about $15 less expensive than here in Tallahassee. Last summer at the ABC store in Dothan the prices were just a little less across the board than Florida prices. The non ABC store was higher by a little bit on most things but less expensive on others. Go figure.

[arrScott]

That's for sure. Virginia may now have the highest tax in the country (definitely in top 4) since we had a recent increase, and one proposition is for Virginia to go out of retail but still control wholesale and importation into the state. One plan is to sell franchises so retailers would have a huge initial startup cost added to the already high cost of starting a biz and putting in inventory. Because of current price structuring, it may be that the price of bottom shelf stuff would increase and selection would go down. The only hope is if some of the big retailers move into Virginia with big bucks. But, that means some of the plan for increased revenues may be lost because (though Virginia would still get sales, liquor, and income tax) profit $$ would get spent in other states and go out of state's economy. And, there may be a net job loss. It all depends on what plan actually gets instituted. If done properly, it could be a benefit for the consumer and could increase revenues for the state.

Virginia is not among the highest-taxing states in the country. The commonwealth has the 18th highest tax burden. The legislature just defeated a proposed $1 billion income tax increase. (Which leaves the state budget with a $950 million hole that, if not filled quickly, will force the state to zero out the state's car tax rebate.)

But you're right to be worried about the various plans the governor and legislators are floating for the ABC. The problem is that the plans are not intended to benefit consumers or open the free market. They're designed purely to raise money for the state in the short term. And so most of these plans do little more than "privatize" liquor sales by selling the public monopoly to a single private entity. (Which is exactly what Gov. McDonnell proposed during last year's campaign. To his credit, he's honest about it; his goal was to raise cash quickly, not to open the liquor market.) Any other form of privatization will be likely to cost the state money in the short term. If there's anything worse for consumers and taxpayers than a public monopoly, it's a private monopoly. At least the people to whom the ABC answer have to come to me and beg for my vote every couple of years.

It would be good if the commonwealth would get out of the liquor business entirely and turn the ABC into a regulatory enforcement and tax collection agency overseeing a competitive private market. But that will cost money up front and save the state little to nothing in the long term, so I'm willing to keep the state-monopoly ABC in place for a few years until the budget situation improves and the politicians feel like they can afford real reform, rather than simply making a bad situation worse to scrounge up a few dollars from a private monopolist.

(And in the ABC's defense, even though I hate the state monopoly system, I've never seen anyone who resembles a minor purchase liquor at one, and I've been able to find just about every bottle I've ever wanted at the ABC. Obscure stuff that I go in expecting the ABC doesn't even have in its ordering system, I routinely find featured on shelf displays. At the large stores with knowledgeable managers, anyway. Except for not being able to find any Buffalo Trace anywhere in Northern Virginia these last couple of weeks! Anyway, point is, Virginia's ABC stores are good enough that I'm willing to push for something better instead of settling for fake "privatization" on the cheap.)