Governor McDonnell soon will unveil his plan to get Virginia out of the Liquor business. For 76 years Virginia has been selling liquor, while other types of alcohol were allowed to be sold in grocery stores and convenience stores. Beer and Wine is sold by grocery store clerks, and Liquor is sold by Virginia state employees.
It has been estimated that by privatizing liquor stores the state will see a onetime windfall of between 500 to 800 million dollars. Opponents to the plan claim that the state should hold on to the stores, which bring in an estimated 220 million dollars a year. Those in favor of privatization see ABC stores as a burden which needs to removed from the state's shoulders, they already have enough to handle with the DMV, to opponents the stores are an asset which must be maintained.
I support privatization for several reasons. First and foremost the state has no business in the liquor business. Selling alcohol should be the business of retailers. The state government is not a for profit enterprise, and should not compete with private business.
From an economic standpoint ABC’s stores don’t make much sense. It is true that the state makes revenue every year from the ABC stores, and selling them would cause the loss of a revenue source. But I would point out that running ABC stores costs the state money. The state has to pay employees, and pay expenses to run the stores, furnish the stores, run promotions, etc. In addition the state run stores take up space which could be used by other retailers and businesses.
However, if we let private retailers sell the liquor, the retailer can do all the work, and the state will still make money from the sales tax, which would be pure profit! And if the power of the free market is as powerful as I think it is the price of liquor will come down with the government out of the business, saving consumers money.
I understand there are many evangelical and faith based groups that are nervous about retailers being able to move into the liquor business, but does the government selling liquor make it any better? People are going to get their liquor from either a private retailer or the government. If they get it from a private retailer it will probably be a little cheaper, and the state will still get some revenue from the sales tax. Seems like a win- win situation.
But let me know what you think. Vote on my poll question.