Privatization in VA: Not as easy as ABC

As I wrote back in November at the Objective Standard’s blog (my colleague Ivan Osorio also wrote about the topic here), Virginia’s new governor Bob McDonnell showed a very promising inclination toward free markets and privatization, though his rhetoric on the subject may have left something to be desired. Specifically, he floated the idea of privatizing the 300+ state-run liquor stores in order to pay for his transportation plan. Regardless of his stated or actual motivation, the end result could have been the long-awaited liberalization of alcohol sales in the state.
The bill SB 443 introduced by state Senator Mark Obenshain (R-Harrisonburg) would auction off the existing licenses in a public auction (with pre-qualified bidders), sell all the real property and allow for the issuance of liquor retail licenses in the amount of 1 per ever 10,000 residents.

On the surface this seems like a definite step toward market freedom.

Unfortunately, Obenshain put the bill on the shelf this week, withdrawing it from the senate Finance committee. Obenshain said he wanted to give the governor more time to consider the bill. On the bright side Obenshain seems committed to the issues and plans to reintroduce a modified version in the special session that may occur later this year or in the following session.  According to the Senator:

“Divesting Virginia’s ABC stores is a win-win situation…Privatization offers consumers the benefits of competition: more convenient hours, wider selection, lower prices, and innovation, just to name a few. It does away with the more than $120 million the government spends each year on administrative costs while creating new revenue streams by auctioning off wholesale and retail licenses. And it gets the state out of something in which it never had any business getting involved.”

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