Obenshain’s ABC bill rejected

Brent Finnegan -- January 30th, 2009

Sen. Mark Obenshain’s bill that would have privatized Virginia’s Alcoholic Beverage Control stores was killed in the Senate Committee on Rehabilitation and Social Services today. In a statement released on Facebook this evening, Obenshain said:

… although we lost a skirmish today, this fight is not over. This proposal has is resonating with people across the Commonwealth; Democrats and Republicans alike know that this is not a legitimate role for state government. I look forward to coming back next year with a bill strengthened by input from around my district and around the Commonwealth.

91 Responses to “Obenshain’s ABC bill rejected”

  1. The Valley Progressive says:

    I now have faith in senate committees. Has this man ever put forth anything that actually makes sense and benefits the PEOPLE of Rockingham county?

  2. Bubby says:

    Hey Senator, when you come back with your new bill, include provisions to extract revenues from the alcohol industry sufficient to off-set the cost to the Commonwealth for the increased availability of hard liquor. Be prepared to show your worksheets.

  3. Lowell says:

    13 to 2 is some rejection. Crushing actually.

    As writes Bubby above, show us the data.

  4. republitarian says:

    “Fast-forward seventy-five years. Control states don’t seem to be in a greater state of decay than their thirty-two non-control counterparts. In fact, the opposite is true, at least when underage drinking, driving under the influence, and alcoholism are your metrics. To many of us, moreover, it is far from clear why government should be in the liquor business, especially with the $115 million in operating and administrative costs incurred in the last fiscal year and the surprisingly low profits achieved in what should be an extremely lucrative business. On gross sales of $641 million, the state netted $103 million in store profits compared to a further $179 million it raised in liquor taxes.”

    I love coming over to “hburgdemocraticnews”.

    I realize it’s certain peoples’ JOBS to hammer everything a republican tries to do….but no reasonable case can be made that the state running ABC stores is a necessary government function.

    I’m just curious why states who let private businesses sell liquor….aren’t passing legislation to have the state sell it, since it’s so great and all?

  5. “hburgdemocraticnews”

    In what way is the original post “hammering” the bill? If you’d look at the Facebook group, you’d see that Gene Hart, David Miller and I are members.

    I hope that Sen. Obenshain takes comments like Bubby’s seriously, because I’d personally like to see phase II of Prohibition end in Virginia. Finally.

  6. David Miller says:

    “I realize it’s certain peoples’ JOBS to hammer everything a republican tries to do….but no reasonable case can be made that the state running ABC stores is a necessary government function.”

    So everyone who has expressed opinion to the contrary to the dairy has no reasonable case.

    Anywho, I also hope that our Sen. will more thoroughly present his next bill to the public and address the concerns raised during this “process”.

    I’d also like to add that it should be a higher priority to lift restrictions on ABC licensees to ensure that our restaurant industry does not fail during this economic crisis. This should be a higher priority.

  7. Bubby says:

    To paraphrase Harry Truman – I don’t hammer Republicans, I just tell the truth and they call it a hammerin’.

    BTW, a 15% return on gross revenue is what we in the private sector call a pretty good profit.

    More math: Alcohol lobby greases Obenshain with $10K of fundage, leverages a $100 Mil deal to sell liquor. Nice ROI.

  8. Lowell says:

    To steal a line from Shannon Dove:

    “To paraphrase Harry Truman – I don’t hammer Republicans, I just tell the truth and they call it a hammerin’. ”

    Bore repeating, yada, yada…

  9. Lowell says:

    On another part of this topic, it seems like one original claims was of bringing in some $700,000,000.00 per year of new revenue for the state. On gross sales of $641,000,000.00?

    This is the kind of figuring what be got us in this mess to start with…

  10. republitarian says:

    So the state should run it ….as long as it’s profitable?

    Let’s just make it easy and let the state run EVERYTHING!

  11. Bubby says:

    Lets get a good deal for the franchise, and not give it away to the biggest donor.

    Why stop with retail? Open the doors to alcohol manufacture and distribution for every vintner and still master in the Commonwealth. Let the mom and pops have a slice of the demon liquor bonanza! Virginia has some real entrepreneurs in that regard! Wait a minute that would endanger the monopoly held by Senator Obenshain’s well oiled friends…

  12. Bubby says:

    Imagine the doomsday scenarios if brewers could distribute their own beer! Surely the world would end if wineries could market their own wines! And if all Virginians could sip the dew that Uncle Earl squeezes they would have little use for that fancy Russian vodka. Freedom!

  13. Lowell says:

    With just enough regulation to make sure Uncle Earl isn’t using an old Buick radiator as a condensing unit.

  14. K J says:

    Let Freedom ring! It would be wise if Virginia would look at other state’s data on many things we don’t currently do now.
    They should check into how privately owned liquer stores fair in other states. Get all the pro’s and con’s on the bussiness end of it.
    How about toll roads?

  15. republitarian,

    Not sure if you were around for the first round of this, but there were quite a few of us who were generally in favor of Obenshain’s bill. I was one of those, but ultimately said that right now it came down to a matter of which made more money given the current budget crisis situation. In case you have not noticed, revenues are down thanks to the state of the economy. Are you for raising tuitions through the roof at the state universities, or maybe throwing lots of people off medicaid as a solution? Of course, the federal stimulus bill will help in terms of giving money to the state, but will not solve all of the problems.

    As it is, I am curious why the vote was so lopsided. It may well be that the numbers that were being touted in terms of costs and revenues by Obenshain were not accurate. In any case, Republitarian, you are making too much of a partisan thing about this and making yourself look silly, although I realize that some here are willing to play the game with you.

  16. This was Mark’s single piece of “good legislation”…shows you were Virginia’s going if it was killed 13-2.

    Mark, here’s an idea for legislation:

    Why not introduce legislation so the people, instead of the General Assembly and other bar card holders, elect Virginia’s judges?

    Recognizing how great a power that is, you people just appear to really fail at electing competent judges who can’t even read, let alone, interpret Virginia statutes.

  17. Republitarian,

    Indeed, regarding the matter of partisanship, if the vote was 13-2, it certainly means that some Republicans voted against it. So, this does not look very much like a partisan issue, much as perhaps you want to turn it into one.

  18. Sorry, Professor. You have me confused with Myron.

  19. Dave,

    Are you referring to me? Unless you are Republitarian, I was not addressing you at all in this. I addressed “Republitarian,” whoever it is that goes by that moniker.

  20. Lowell says:

    Barkley,

    What are your thoughts on Bubby’s idea of eliminating the Virginia restrictions on sale and distribution on alcohol products outright?
    Manufacture and sales could still be regulated, but the market could be opened up.

    And David Miller,

    I like your idea, “I’d also like to add that it should be a higher priority to lift restrictions on ABC licensees to ensure that our restaurant industry does not fail during this economic crisis. This should be a higher priority.”

    What would be the result of reducing the percentage of food sales necessary to sell alcohol? I’ve never really heard that issue discussed.

  21. Lowell says:

    I’m not trying to co-opt your blog Brent, but I wonder if your readers would mind voting in my poll about predatory lending and overdraft fees?

  22. Jamie Smith says:

    Lowell, your poll is awfully narrow. If we are going to regulate what banks can charge then do we regulate what they can pay on interest bearing accounts, CDs, etc. That might be ok for many bankers who remember, or have heard about the old days of 3-6-3 banking. Pay 3% for deposits, loan it out @6% and be on the golf course at 3 p.m.

  23. Lowell says:

    Thanks for the feedback Jamie.

    I wanted to keep the focus pretty narrow. Primarily relating to the opinion column also linked from the same post. Certainly a broader discussion must take place, but again I meant to keep this specific.

    Kind of a “one piece at a time” development of the conversation and better understanding of people’s opinion.

    And you’re right, banking has certainly changed…

  24. David Miller says:

    Legislation currently mandates 40% food sales at all establishments that sell spirits. If the establishment cannot sustain that percentage of sales in the food category their license is revoked (or they get caught lying and go to jail). This law negatively affects all businesses that sell alcohol and punishes those that sell more, ie bad for business.

  25. MF says:

    Dave is right. And this problem will only get worse as the economy goes south. People will stay home to eat because they can’t afford to dine out, but still want to be social when they drink. The 40% regulation is what Obenshain should be focusing on if he wants to help local business.

  26. Gene Hart says:

    Have I stumbled back into sync with Bubby and Lowell (or they back into sync with me)?

    Beer brewers, vineyards/vintners, and small distillers should be licensed, regulated for safety, but allowed to operate and market without the state telling them how they can and cannot do so.

    The 55/45 food/alcohol limitation should be ended or modified. Perhaps a license for no ratio for on-site consumption should only be issued in conjunction with a required minimum insurance policy and imposition of Dram Shop liability for those licensees (with businesses desiring to have a 55/45 license not subject to those provisions). After all, it should be easier for a bar to tell if its patrons are too drunk to drive than it is for a restaurant whose primary goal is to sell food.

    The state should get out of the alcohol retail business and just license sellers. Localities, not the General Assembly, should be the ones who limit locations through zoning.

    Our legislators must be willing to charge enough for licenses and impose sufficient taxes on alcohol products to make sure that revenue to the general fund increases rather than decreases. If they aren’t willing to do that openly by their vote then they should acknowledge that they prefer the hidden “taxation” that is happening now. After all, if a bottle of Jack costs $2 and the state store raises the cost to $3, isn’t that really a tax by another name on that particular consumer?

    Of course, I was speaking with a Republican friend of mine the other day about this issue. I tried to emphasize the concern that many people have that privatization/deregulation would cost the state money. He incredulously asked something to the effect of “who possibly could/would oppose raising taxes on alcohol in order to raise revenue?” I laughed and suggested “those same people who declared the proposed 30 cent increase on a pack of cigarettees to be ‘dead on arrival.'”

  27. Gene Hart says:

    So, Bubby and Lowell, how do we make sure that ABC privatization/deregulation moves forward in a fiscally prudent manner in the 2010 General Assembly session?

    Hint, it involves November 2009.

  28. The Valley Progressive says:

    Gene,
    While “ABC privatization/deregulation moves forward in a fiscally prudent manner” may be a good start, what do you propose to do about the current monopoly on distribution of said ETOH products? If we’re going to address the issue of state run ABC stores, then lets fix the whole thing to support the industry as a whole, not just the corps, and give the little guy a chance.

    It is currently against the law for independent brewers/wineries to distribute their products on their own. This law is significantly hurting the smaller operations because they must get the blessing from the distributor gods (of which there are only 2 or 3) at significant cost to the vintner.
    If the distributor refuses to carry the independent brewer’s product (maybe under pressure from a larger competitor) then essentially the upstart brewer is out of business.

    Not surprisingly Obenshain’s bill serves to protect that monopoly, or at least not diminish it, while increasing the profits of a select few. If you really want to help the industry, create jobs and support the american spirit on entrepreneurship then you need to address this issue.

    full disclosure: I didn’t realize the monopoly angle on my own. It was presented to me by a new friend at lunch today.

    Like the guys in the Guinness Ale commercial say, “Brilliant!”

  29. Bubby says:

    Delegate Hart?

  30. Gene Hart says:

    Bubby, you are a winner! First (several) drinks on me at the JJ Dinner. You will be there, won’t you?

    VP, I agree that the currently closed markets must be opened up to the small producer/marketer. We can’t get rid of a governmental monopoly only to replace it with a big-business oligarchy. For me, that would be as important a goal for privatization/deregulation as the goals of getting the state out of a non-core function and increasing revenue.

  31. The Valley Progressive says:

    Gene,
    Thanks for the response. As for the answer to your riddle, I too guessed Delegate Hart, I just didn’t post it. Can I get in on the free drinks? :-)

  32. Gene Hart says:

    Anytime, just stop by.

  33. Lowell,

    I just googled “state alcohol stores and alcohol use.” Nothing came up, a big fat zero. I think that Bubby’s concerns in particular are basically baseless. I think there should be limits perhaps on having alcohol sold near schools or certain other locations, and maybe some other restrictions, but basically I think VA should be like most other states on this. Again, I might be open to certain other details of restrictions and would like to make sure the move makes money, but otherwise, I think it should not be too limited. As Brent put it, this has been some sort of holdover of prohibition, but a pretty ridiculous one.

  34. Lowell says:

    Barkley,

    Bubby was (I’m pretty sure) being tongue in cheek when referencing the “doomsday” scenario.

    What he suggests is more an open market for production and sale which would allow for more competition, innovation, and opportunity for Virginia’s citizens.

    Rather than funnel everything by law through a few distributors as is currently the case, he proposes allowing folks to produce, market and sell their products themselves. He recommends that we not replace a state monopoly with a state sanctioned quasi corporate monopoly.

    This would allow for new and small distillers, vintners and brewers to develop and grow home based businesses. Mom and Pop Wine Shop, or Three Guys Jedi Brew Masters etc…

    I think you and Bubby and Brent and Gene are more on the same page by no small measure than you are apart.

    Correct me on any misconception Bubby?

  35. Bubby says:

    Somebody has been skipping classes! Obenshain’s facilitation of the externalization of civil costs related to increased availability of alcohol was last week’s discussion. I was pointing out the frayed hem of his soiled Conservative vestments. This week we are delving deeper into the possible motivations (contributions), and his limited commitment to opening the alcohol industry to free markets. This isn’t about correcting prohibition, it is about serving, protecting, and strengthening monopolies. Same as it ever was.

  36. Lowell says:

    Imagine this scenario in Virginia.
    Think about the opportunity for innovators, investors, farmers(this direction could help save Virginia’s Family farms!), and customers!

  37. Bubby says:

    In 2005, the alcohol beverage distributors/brokers contributed in excess of $900,000 to Virginia political campaigns, according to the Virginia Public Access Project.

    In 2006 a Virginia Senate subcommittee (hello Obenshain) torpedoed the ability of Virginia Farm Wineries to self distribute. It never saw the floor of the Senate.

  38. I certainly oppose replacing the state’s monopoly with a private one, and I have not read the details of Obenshain’s bill. It may well be that elements of it relating to private monopoly may be why it apparently faced bipartisan opposition.

    Regarding Bubby’s reassertion of the “externalization of civil costs of related increased availability of alcohol” is what I am differing with. Not much evidence out there, if any at all, of such costs, and Bubby has been quite eloquent and long-winded on the topic. I note that if he is right, then increasing the rights of farmers and others to innovate in producing more and different alcoholic beverages will add to this “problem,” as Bubby sees it, and which I do not see as a problem, or much of one, although as I noted I am OK with some limits on distribution and so forth.

  39. Lowell says:

    Riddle:
    Why is October 14, 1978 important to this discussion?

  40. Lowell says:

    There were fewer than 60 of these as of 1993, but now more than 1,400. What does this statistic reference?

  41. David Miller says:

    What I find wonderful about our current state of affairs is that Midtowne Market sells case after case of Stone Brewing Co.’s beer (see article link by Lowell, ie shipped across the country). It’s amazing, and yet legally to buy and sell Cally’s excellent brews they would have to hire on a distributor, ship it to said distributor and then that distributor would have to ship it back to me. Major middle men, major money to be bypassed and Cally’s is all of two blocks from Midtowne. Does this make sense to anyone?

  42. Brian M says:

    Lowell:

    “On October 14, 1978, President Carter signed House Resolution 1337. Senate Amendment 3534 to that resolution called for equal treatment of home beer brewers and home winemakers. This law allowed for brewing up to 100 gallons per adult or up to 200 gallons per household per year. The amendment was proposed by Senator Cranston of California, Senator Schmitt of New Mexico, Senator Bumpers of Arkansas and Senator Gravel of Alaska.”

  43. Lowell says:

    Outstanding Brian M.!

    Buy you a bottle of Newcastle as prize I will.

  44. Lowell says:

    How will you do,
    on question two?

  45. Brian M says:

    Well, my good man Lowell…

    I may have to give up on that one. I need another crumb of a hint.

    I can say, at least, that in American adults ages 18-24, there were 1400 unintentional alcohol-related deaths in 1998 (or as recently as 2002 from what I read). But that’s about all I can offer.

    There is some debate as to whether that number is accurate or not, but I don’t feel like getting into that one. lol

    I will continue to scour the www

  46. Lowell says:

    I think I’m being too generous here Brian.
    2007 stats:
    53 Regional
    392 MBs
    975 BPs
    1,420 Total CBs

    20 LBs
    23 Other NCBs

    1,463 Total U.S. Bs

  47. Jason M says:

    This should not necessarily be a deciding factor on the issue, and it may or may not play well with my other free-market beliefs.

    However…

    I have to say it is a pleasure to live in VA where there is NOT a liquor store on every corner. Unlike MD where I grew up. Its refreshing not to have all that gaudy signage and advertising. I can’t imagine it helps boost property values :)

    Also, FYI, in MD you can not buy beer or wine in a grocery, so this may explain the quantity of liquor stores. That may not be an issue down here since I’m sure the profit margin may be a little less if the liquor stores are in price competition with Krogers for beer sales.

    I agree that the distributorship laws are silly and outdated, if they ever had a point in the first place. I also agree that the ABC in general treats restaurants as an adversary and not a partner in protecting the general public.

  48. Brian M says:

    Ahhh… breweries. That was my second thought after rereading the post. So to expand your very generous hint:

    2007 stats:
    53 Regional Craft Breweries
    392 Microbreweries
    975 Brewpubs
    1,420 Total Craft Breweries

    20 Lare Breweries
    23 Other Non-Craft Breweries

    1,463 Total U.S. Breweries

  49. Lowell says:

    I guess I owe you several micro brews of your choice Brian.

    But just think about what stripping the constraints off of people’s access to REAL free trade amongst each other could do. David Miller is on to something. So is Bubby, and Gene, and Barkley, and Brent…

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