Bill would do away with ABC stores

MONTGOMERY, Alabama — Alabama’s familiar ABC stores could be replaced with independent liquor stores under a proposal to privatize the retail functions of the Alcoholic Beverage Control Board.

Sen. Arthur Orr, R-Decatur will propose the idea in the upcoming legislative session, the latest development in the debate over the state’s role in the booze business.

“The fundamental question, I think for us as legislators and as a state, is should the state of Alabama be in the retail liquor business in the twenty-first century. Is this truly a function of state government?” Orr said.

There are currently 169 retail ABC stores across the state. Orr said eliminating the expense of those retail stores – including rent and employees – would save about $46 million annually.

“By not having the state employees, the leases, the utilities, the insurance , the equipment and the cash registers – all that goes away,” Orr said.

Alabama is only one of 12 states in the retail liquor business, according to the National Alcohol Beverage Control Association, an organization representing the states plus local jurisdictions that directly control the distribution and sale of alcohol.

However, those 12 states handle retail functions differently. Some have only state stores. Others have licensed “agents” that sell liquor for the state within a business. Alabama is unique in that it has a mixture of state stores and private package stores.

Under Orr’s proposal, the state would phase out retail operations by October 1, 2013. Licenses for private stores to replace the state stores would be based on sealed competitive bids.

Orr said his proposal would limit the number of retail stores that could be set up in a particular area.

“We do not want a liquor store on every corner,” Orr said.

The proposal would create the five-member Retail Sales of Liquor Market Zone Commission to determine the number and location of retail licenses within market zone.

Orr said it “would determine what is a reasonable amount for a Dothan or a Jefferson County.”

However, others in the Alabama Legislature aren’t sold on the idea of completely privatizing the liquor business.

“I’ve got serious concerns about it and the motivations behind it,” House Minority Leader Craig Ford, D-Gadsden, said.

Ford said he believes the state’s retail stores are efficiently run and bring in revenue for the state and he’s concerned about what the numbers would look like under privatization.

“The fundamental question, I think for us as legislators and as a state, is should the state of Alabama be in the retail liquor business…”
Ford said he is also concerned about the hundreds of employees that would be displaced.

Orr said his proposal would give the displaced employees some preference on the retail licenses and new state jobs.

A spokeswoman for Gov. Robert Bentley said the administration did not have a position on the proposal because they had not seen the legislation. Likewise, ABC Administrator Mac Gipson said he also did not have a position until he saw a bill.

NABCA President James M. Sgueo urged legislators in any state considering privatization to look what the stores generate in revenue and not just how much they cost.

“It’s not like the retail is losing money,”Squeo said.

Some states have abandoned the old state store approach and others are considering it.

Iowa in 1986 got out of retail operations and West Virginia followed in 1990, Squeo said.

Washington recently got out of the wholesale and retail operations. However, instead of bringing prices down, as some had hoped, average liquor prices jumped 10 percent since a year ago, according to the Associated Press.

Orr said that is a concern he wants to head off.

“I don’t think there would be a sentiment to see an increase in liquor prices,” Orr said.

Orr said that could mean dialing back the mark-up and taxes to make sure that consumers don’t see sticker shock at the cash register. That could reduce the savings to the state, Orr said, but he believes the savings would still be significant.

“Whether it’s $46 million or $30 million, the budgets are so desperate for funds, we need to consider every source of revenue that we can,” Orr said.

Asked about the outlook for the bill, Orr acknowledged it would be difficult

“There’s a lot of interest in continuing on the status quo by those involved in the current system…. But it’s a debate that needs to be had,” Orr said.

By Kim Chandler


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