RICHMOND—
The governor's initiative to privatize liquor sales in Virginia is gaining steam. Former VABC Chairman Robert Grey and Governor McDonnell discuss how it could work."We always talk about how the devil's in the details," said Grey, who served as the agency's chairman from 1983 to 1985. "Here's one situation where it's really important to know the details."
Grey said it's extremely difficult to predict how a private liquor industry in Virgina would impact both businesses and consumers, without knowing the particulars of the plan.
For example, he noted the state's ability to grant franchises and exclusive territories- or not- would play a role in determining the price of the liquor licenses, the number of stores, the amount of money the state reaps from initial sales and the cost to consumers at the register.
"Once we have a system, what does it do?" asked Grey. "Is it free of corruption? Is it fair in terms of what is provides? And does it give a reasonable rate of return for those who make an investment?"
CBS 6 questioned Bob McDonnell about the particulars of the privatization blueprint a couple of weeks ago.
The governor didn't offer many details, but did say the price tag for liquor licenses would be determined by "the free market," and that the state plans to "limit the number of stores to somewhat more than we have now," but added, "it would have to make economic sense."
McDonnell said Virginia will remain at the bottom of the list nationally in terms of liquor store density.
He also proposed negotiating a revenue-sharing agreement with retailers and wholesalers, or instituting a 'value-added tax,' to make-up some of the money the state will lose in revenue.
"It's just one more way we can demonstrate that the free market, that the private sector, that the business community ultimately does a better job than government in being able to control commerce," said McDonnell.
To watch Sam Brock's full report on the potential layout of privatization, click on the video link above.
