Virginia May Privatize ABC Stores; It’s about Time
In a time when the federal government’s involvement in the economy appears to only grow, it’s encouraging to see at least one industry where the trend may soon move in the opposite direction, even if at the state level. Virginia Governor-elect Bob McDonnell has proposed priviatizing the state’s liquor stores — known as ABC stores, for Alcoholic Beverage Control.
As Garrett Peck, author of The Prohibition Hangover, notes in The Washington Post, this is long overdue. (The op ed is due to appear in the Post‘s Sunday edition, but it’s already online.) The ABC system, which several states adopted after the end of Prohibition in 1934, is today an anacrhonism that doesn’t even work very well.
ABC was once about promoting temperance, but the abstinence movement has basically died. Two-thirds of American adults drink alcohol. In reality, Virginia ABC is now about generating revenue for the state — and at that, it isn’t particularly efficient. Virginia can make more money — as can localities — by privatizing the system, both from auctioning the licenses and through ongoing tax revenue. The private sector will assume the operating costs, shifting ABC authority to where it properly belongs — regulation and enforcement.
And then there are the consumer implications.
Virginia’s ABC stores are a tower of mediocrity. They are centrally managed retail outlets that would have been palaces in the Soviet Union, but today they are anachronistic. They offer highly limited choices, often lacking exciting new brands or those with a cult following. Staff members generally aren’t knowledgeable about how to mix drinks or make cocktails. And the prices are artificially high because there is no competition: The state decides what to charge.
For more on The Prohibition Hangover, see here.