Step Right Up for Transportation Snake Oil


    A recently formed coalition of major big box retailers is funding a push to get its hands on Virginia’s spirits sales. The group includes Costco, Safeway, Wal-Mart, Kroger, and Food Lion and other members of the Virginia Retail Merchants Association. According to the Marin Institute, the same players were behind a push earlier this year to privatize liquor sales in the state of Washington.

    If Washington is an example, look for the coalition to dump massive amounts of money into the effort to get privatization. The Marin Institute noted that Costco alone spent nearly $1.2 million and  used its employees as signature-gatherers in its stores to get a privatizing initiative on the November ballot there.

    With Virginia’s lax-to-none campaign contribution “laws,” does anyone want to guess how much money will flow into various PACs and campaign coffers before the special General Assembly session is called by McDonnell to push this idea down our throats?

    As the Marin Institute points out, “If privatization passes in these two states, the only chain these retailers will create will be the one around the kids and communities of Virginia and Washington, locking them more tightly in the grip of Big Alcohol’s sales, advertising, and marketing machine.”

    Even some Republicans are having a hard time swallowing this 100 proof snake oil being pushed by McDonnell, among them Tom Gear, Emmett Hanger, and Bob Marshall.

    Tom Gear (R-Hampton), who is the chair the Alcohol Beverage Control subcommittee of the House General Laws committee, told the Washington Post that he has “reservations.”

    Emmett Hanger (R-Augusta), who has been the chair of the Senate committee that has looked at previous attempts to privatize alcohol and rejected them, told the Post that he’s “predisposed not to support the concept.”

    My favorite comment reported by the Post is that of Bob Marshall (R-Prince William), who said he wants to make sure residents support abolishing the ABC store system which was first established by a statewide vote. Marshall said that he is considering introducing a bill that would require a referendum on the idea, a step McDonnell has said he believes is unnecessary.

    Whether the pro-privatization money deluge to come will eliminate the reservations of these Republicans and of some Democrats – who historically have shown that they will vote for something for a much smaller campaign contribution than a GOPer – remains to be seen.

    I am still waiting for the conservative, fundamentalist church crowd to say anything about McDonnell’s plan to turn a working alcohol sales system that benefits the state and controls alcohol sales into something that will lead to the ultimate development of a big-box retail oligopoly that will monopolize ever increasing booze sales and consequently create more social problems for the state.

    Does anyone think that Walmart or Kroger will only sell booze from 9am-6pm, six days a week? Try 24-7 instead. Does anyone think that all the big-box cashiers who will take over the responsibility of carding customers will be as effective as ABC store clerks?

    How can allowing grocery store chains and big-box retailers sell alcohol create new jobs? Those outlets won’t need any additional employees to sell liquor.

    Does anybody really think that the $112 million in annual ABC profits can be recouped by licenses and increased sales? If so, I have a great plan to eliminate the car tax that I can sell you…again.

    All I can hope for is that the Senate will stand firm in the face of a money deluge, and that Bob Marshall succeeds in forcing a referendum, where the opponents of this boondoggle at least would  have a chance to argue their point of view.

    • Dan Sullivan

      it’d be more money lost to the general fund. At least defeat would be a short term loss.

    • somethingblue

      I understand the economic arguments against getting rid of the state monopoly at this particular point, i.e. that the state would be trading a short term budget boost against a much larger loss of revenue going forward.

      But what I’m hearing from a lot of posts on this topic is not just that economic argument, but a kind of moralistic neo-prohibitionism that I find weird and misguided. I’ve lived in states that have privately-owned liquor stores and I haven’t noticed that those states have notably more social problems than Virginia. This all seems like sheer big-brotherism to me, with a strong dash of well-we’ve-always-done-it-that-way.

      As for Walmart and Kroger selling booze 24-7, that doesn’t seem like a real argument. They’ll sell booze when they’re allowed to sell booze by state law. If you don’t want booze sold after 6, have the law say that.

      I’m no McDonnell fan. I don’t think privatization is the answer to everything or that the free market always knows best. But if the economics were equal I would have no problem with it in this case. Government should have better things to do than run a chain of liquor stores.

    • blue bronc

      I have not lived in a state that privatized the booze industry so I do not know the immediate and long term changes that occur within the various governments and the companies that take over.  I can run through various scenarios and feel comfortable with the outcomes.

      From much of the discussion here and on other media forms there is a very good debate about those economic scenarios and the social/moral guesses.  The debates are honest, for the most part, as long as the gov and his people are not talking.

      The difficulty of switching from government owned and run booze to private ownership is tremendous. In particular who “wins”, such as the gov’s buddy’s or Sam’s or not-Sam’s everybody else, or mom & pop or limited licenses.

      The hard part during this economic cycle, I think of it as the Bush Depression, is selling the booze industry cheap. But, that will probably be true no matter which economic cycle we are in, the Bush Depression or the Clinton Boom. The reason is the state has lived with the current government ownership from the start.  If it had been in private hands from the start then the state income would have been accepted all along.

      Now, the question is how to live without a monopoly. The answer to that question is what people have to accept. If the answer is get the government out of the hard liquor industry then that monopoly income either has to be replaced with income from some other source, higher sales or higher tax on the booze or tax on some other catagory.  If the answer is to have the government be the middleman that has a different money result.  And, if the government stays in the current role there are no changes.

      The short term income from the license sales is only a magicians hand wave distraction.  I cannot believe the gov is that ignorant as to think people will accept that as the one and only solution.

      But, I do think the leap to privatization at this point on the economic cycle is a political ploy and kiss up to the anti-government people.  But, then I have to think that Republicans do not have the ability to look beyond the short term immediate income and the future be covered by the grandchildren.  

    • Colston Newton

      Back when Virginia was all wrapped around the axle about whether to have liquor by the drink it was the preachers and bootleggers fired up against it. Now, its the preachers and big money interests all fired up to take not the liquor but the profits away from the people of Virginia. Preachers playing the same old song, “It’s wrong for the state to sell John Barleycorn” and the big money more than happy to take those millions off the state’s hands and assuage the religious folks’ delicate consciences.