Wednesday, January 12, 2011

Gov. Robert F. McDonnell Unveils New Plan for Liquor Privatization

According to the Washington Post, Gov. Robert F. McDonnell will unveil a proposal Wednesday to close 332 state-owned liquor stores and replace them with 1,000 private retail outlets - a scaled-back version of a plan he's pushed for months to end Virginia's monopoly on the sale of distilled spirits.

Under McDonnell's liquor proposal, the state will continue to act as the wholesaler of liquor in Virginia, buying thousands of cases directly from distilleries and selling them at a profit to private retailers, who would then set prices for consumers.

Aides to the governor hope prices will fall because the state will cut the markup it applies to liquor prices from 69 percent to 50 percent.

The stores would be be sold off over an 18-month period that would start July 1.

McDonnell hired PFM, a national financial management company, at a cost of more than $75,000 to consider ways to privatize the state's stores without losing money after he did not have enough votes to hold a special session to take up the issue.

Licenses would be sold to the highest bidders and split among big-box stores, such as grocery stores and Wal-Mart; convenience stores and drugstores; package stores and wine stores; and small convenience stores.

A legislative study released in November showed McDonnell's original proposal may have overstated by tens of millions of dollars the amount of money Virginia could make from selling the entire system. His new figures came from PFM.

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