In what’s been called a “drinking town with a football problem,” the only place in Blacksburg to get anything stronger than a beer is the local ABC store.
But ABC stores may soon become a memory, with Gov. Bob McDonnell planning to get Virginia out of the business by privatizing the sale of liquor.
Virginia’s 76-year-old monopoly on the wholesale and retail of liquor dates back to the days of prohibition. It is one of only 19 states in the nation in which the state government directly controls sale and distribution of liquor.
Essentially, McDonnell’s plan for privatizing would create 1,000 retail liquor licenses the state would auction off to the highest bidding businesses. Liquor would be regulated similarly to how beer and wine are currently regulated.
McDonnell was unable to garner the necessary support to justify calling a special session of the General Assembly this November, and must now wait until January’s regular session to try to get the privatization plan passed.
The main argument against the plan has been ABC revenue — almost $50 million — that the state would lose each year if it privatized, a number that’s especially hard for legislators to swallow in the current economy.
“When he first came forward with the idea during his campaign, it was with the promise that there would be no lost revenue. And right now, it stands at a little bit more than $50 million of lost revenue per year,” said Jim Shuler, state delegate for the 12th District. “The ABC is one of the few agencies that makes a profit, which is huge. If it’s not broke, why sell it?”
Blacksburg’s ABC store on South Main Street grossed more than $1.6 million in profits last year, according to the 2009 ABC annual report — money which went into the state’s general fund.
For consumers, privatization could increase the availability of liquor by increasing the number of outlets where it can be sold.
There are currently 332 ABC stores in the state, so McDonnell’s plan would increase the number of locations that sell liquor about threefold.
Privatization could cause noticeable changes in Blacksburg, where the town’s sole ABC location does booming business despite Blacksburg’s relatively small size.
The store sold the sixth-highest number of gallons in the state last year, according to the ABC’s 2009 annual report, and was topped only by stores in major cities such as Fairfax, Arlington, Richmond and Virginia Beach.
“If it were privatized and opened up to the private business, you’d have a huge amount of interest locally of people that wanted to get into the business,” Shuler said. “You could potentially go from one liquor store in Blacksburg to — how many more? A lot more probably.”
Blacksburg mayor Ron Rordam said the town has already considered ways to control the expansion of liquor outlets.
“There’s always concern with a lot of alcohol consumption, and I think the way to cut down on some problems that could come about is through zoning,” Rordam said. “From a local perspective, that’s the thing we’d be most concerned about. That’s the main thing we really have control over.”
Steve Clarke, director of Virginia Tech’s Campus Alcohol Abuse Prevention Center, said increased accessibility could mean more alcohol-related problems among students.
“Right now we have one store; if this law passes we’ll probably have three,” Clarke said. “We’d definitely see a shift in drinking behavior — we’d see more consumption of liquor among students.”
He estimated about 77 percent of Tech students drink, regardless of age, and that the CAAPC currently sees about 1,000 people per year.
Clarke said he feared some of those new private stores would not be as strict to check IDs, noting that compliance rates in privatized states are lower than in control states.
If ABCs were privatized, Clarke said he would try to work with local liquor stores to make sure what they were selling was appropriate, noting that private liquor stores in other states can sell Jello-shots and even aerolyzed alcohol — items prohibited by the ABC.
Despite the concerns, recent research has suggested a minimal impact in a move to private ownership.