VIC: Don’t Fall for ABC Sale

I don’t have to wonder any longer where at least part of the faith-based community stands on Bob  McDonnell’s rush to privatize Virginia’s ABC stores. The Virginia Interfaith Center for Public Policy, Virginia’s oldest nonpartisan, faith-based advocacy group, has issued a report “Off the Wagon: Why ABC Privatization Is a Bad Idea.”

Using a series of questions and answers, the report makes the case that it would be an extremely  bad idea, both socially and from a fiscal point of view, to change the present state system in Virginia by selling off the wholesale and retail ABC businesses.

One of the arguments being made by McDonnell and the other worshippers at the altar of the free market is that privatization will result in lower prices and greater variety for the consumer. Results in states that have privatized liquor prove otherwise. In Iowa, where liquor sales were privatized in 1987, it only took one year for prices to increase six percent. In 1981, three years after privatization, voters in Alabama decided to return to state stores because of price increases and the loss of available brands of liquor.

Noting that the ABC system is a “well-run agency that is a consistent source of revenue” for the Commonwealth and that privatizing sales will “disproportionately affect lower income and minority communities” with the social problems that will come from more than tripling the access to liquor and the consequent difficulty in controlling legal access, the VIC says, “Don’t do it.”

Paul Goldman was absolutely correct when he noted recently that privatization will mean “an oligopoly in the wholesale business – very valuable licenses for some very politically connected people”

This may be what the push for privatization really is about. I have no doubt that the consortium of big-box retailers that has taken up the cause of privatization in both Virginia and Washington aren’t concerned with whether the General Fund keeps the same amount of income from liquor sales or whether money is raised for transportation. They want an oligopoly that can pull big profits from liquor to line their pockets.

If Bob Marshall does get his bill through to have a referendum on privatization, just imagine the flow of money into the coffers of politicians and PACs to get that referendum passed. Just one of those players, Costco, spent $1.2 million in Washington state to get a referendum on the ballot to privatize booze sales.

Some things to look for as this mess unfolds:

Will localities have their right to control zoning of liquor stores stripped from them, in light of the tripling of outlets being planned? Will there be a push to loosen or drop restrictions on liquor advertising?  

These are questions asked by Jeff Shapiro of the Richmond Times-Dispatch, as he noted that Bob McDonnell pulled in about $80,000 from Chesapeake-based Associated Distributors, which “could be money well spent.”

Wouldn’t Associated Distributors just love to be one of the handful of companies with big enough bucks to buy the ABC wholesale business in the area they serve, gaining the wholesale profit the state now receives…and with a free hand to jack up prices to pad that profit?

There would be one inadvertent good result from a successful push by Bob Marshall to have a referendum of ABC privatization. That effort would slow down the rush to steamroll this boondoggle through while a new governor has a “honeymoon” of sorts.