Tuesday, May 25, 2010

“Set Virginia booze free” by Tyler R. Boyd (Opinion, Thursday) proposes the elimination of Virginia’s state-run liquor stores. Eliminating a state-run anything is usually a winner in my book, but this proposal left me confused and skeptical.

The amount of money in play is the difference between what the distillers charge for the products and what the consumers pay. I don’t see how the size of that pie would be changed much by the privatization scheme. How can a large amount of money (claimed to be $500 million) be generated for the state by dividing up that pie differently? Private stores may be run more efficiently than the state stores, but there would have to be a great deal of inefficiency in the current stores to generate the claimed additional money for the state.

The new, private stores must generate some profit for the proprietors (after taxes), and that obviously is a new item out of the pie. The state currently must have huge bargaining power with the distributors to get good deals that individual stores will lack and that should reduce the pie for the private stores.

Is there some objective study of this proposition that has had in-depth review by knowledgeable and independent persons? One would hope the half-billion dollars is not expected to come from increased consumption. A skeptic also would point out the potential for “deals” in who gets to set up the new, private stores in profitable areas. It would seem there will be a real opportunity for politics to enter the determination of who gets the new, private franchises in prime locations. Then again, perhaps that is the real reason some want to make the change.


Vienna, Va.

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