Re: Privatizing ABC Stores
Posted by:
duhhhhhh
()
Date: January 10, 2013 07:28AM
@BelowMe - The plan he originally floated wouldn't have done anything to the beer & wine wholesalers except expand their business as they would have taken on distributing liquor too.
Virginia requires all retailers to obtain their alcoholic beverages via local licensed distributors. Even Wal-Mart, Costco etc. The distributors have a government sanctioned/required monopoly at the brand level as each brand of beer/wine can only be sold by one distributor.
In other words, if you want to carry Budweiser, you have to source it from Guiffre. They can charge whatever they want because there is no competition for Budweiser. You either pay it or don't carry Budweiser.
Liquor meanwhile is distributed by VABC. They do periodic checks & compare inventory to invoices to make sure you are not going into DC and sourcing your alcoholic beverages from one of the warehouses over on New York Ave.
This is actually the reason why Sangria was outlawed for so long, because once the liquor is mixed into the Sangria, you have no way of proving where the liquor was sourced.
The original plan (from what I recall) was:
- Established beer & wine distributors in good standing with the state would take over distribution of liquor alongside beer & wine.
- VABC properties would be sold off (hence that first year high, income wise).
- The number of liquor stores in the state would be limited to compare closely to how many VABC stores were in existance prior to privatization (to keep VA from turning into a liquor store on every corner).
- Retailers would enter a bidding system to buy a license to sell liquor.
- ABC would enforce liquor laws/sourcing same as they do beer & wine.
The plan actually sucked ass from a retailer perspective because the licenses were going to be so limited, the only places that would have gotten a license would have been big chain stores like Wal-Mart, leaving mom & pops out of luck.
The plan probably would have resulted in better selection but PROBABLY would have made pricing more expensive as you'd still be stuck with the monopoly at the distributor level and liquor drinkers are FAR more brand-centric than beer or wine drinkers (they would know they could charge an arm & a leg for premium Vodkas because not many people are going to start regularly drinking Kamchatcka Vodka out of a plastic jug over Goose.)
As everyone else has pointed out, it would have sucked from a revenue perspective, even in the relatively short term (5 yrs) and was overall a bad idea but I would be willing to bet of all the people who were angling to shut it down, it certainly wasn't the distributors.