Winemaker Magazine Free Trial

Thursday, September 23, 2010

Virginia wineries back liquor privatization proposal (?)

So says the title to this article regarding the proposed privatization of state liquor stores. But do they? Privatization was a major campaign plank for Governor Bob McDonnell (R) and he hopes to generate anywhere between $300 million and $500 million for the state’s transportation coffers. Now the Governor and First Lady have been outspoken advocates for Virginia wineries, so it is reasonable to conjecture that the The Virginia Wineries Association endorsement of the plan was a political decision rather than a decision on whether the plan actually benefits its members. On the contrary, I would suggest that individual wineries would prefer stability over the instability caused by privatization - particularly when privatization enhances the power of the - already too powerful - wholesalers oligopoly. In addition state liquor stores may be the only retail outlets (beyond the tasting room) for some Virginia wineries; now these wineries will have to rely on the three tiered market.

Now we at the libertarian WineCompass would normally endorse a decline in government's role in private industry; but not in this instance, when the government is simply transferring power to a government created oligopoly. And with HR 5034 resurfacing, the wholesalers may get even more powerful.

1 comment:

Scott said...

Hear hear! I agree.