Privatizing Virginia’s liquor stores could lead to increased alcohol consumption as private sellers seek to boost their sales, Gov. Tim Kaine said Thursday, criticizing a key part of Republican gubernatorial nominee Bob McDonnell’s plan to fund transportation.
Kaine, speaking on a monthly call-in program on Richmond’s WRVA radio station, defended the state’s spirits monopoly as an important revenue generator.
McDonnell has made dismantling the state-run liquor industry a cornerstone of his plan to close Virginia’s growing gap in road and transit funding. His campaign estimates the plan would generate an upfront infusion of $500 million.
Privatization, however, would offer dwindling returns for the state. Virginia’s 335 liquor stores sold $665 million worth of booze last fiscal year and generated $111 million in profit, which funds state programs.
Kaine, not mentioning McDonnell by name, said Virginians’ consumption of liquor was less than the national average, while they consume about as much of other alcoholic beverages. In Virginia, wine and beer can be sold in supermarkets and convenience stores.
“I don’t think the state needs to be in the liquor sales business, but I’m not sure that I want to get through a tough time by saying, ‘By gosh, we should sell a whole lot more spirits,’ ” Kaine said. “In some areas, we might really regret that we did that.”
McDonnell spokeswoman Crystal Cameron pointed to states such as West Virginia and Iowa that have recently privatized alcohol sales as examples of how the plan could be successful.
“Beer and wine are already sold by private entities in the commonwealth, and the sale of alcoholic beverages would best be handled by the free enterprise system,” she said.
McDonnell is not the first Virginia politician to recommend the state exit the liquor business, nor is it an exclusively Republican proposal. In 2002, former Democratic Gov. Doug Wilder headed a commission that issued such a recommendation.
McDonnell’s opponent, state Sen. Creigh Deeds, has said the liquor privatization plan is not viable because of the lost revenue.
