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Posted at 1:05 PM ET, 10/19/2010

Wholesale worry for Va. beer and wine suppliers

By Peter Galuszka

Virginia Gov. Robert F. McDonnell has certainly had plenty of problems hacking out a plan to privatize ABC stores.

Projections of revenue shortfalls of up to $47 million from what state-owned liquor stores make each year have even his fellow Republicans scratching their heads. He's been through a gamut of proposed fees masquerading as taxes and vice versa.

Now he's facing the wrath of some of his biggest campaign contributors -- Virginia-based beer and wine wholesalers.

For years, firms such as Loveland Distributing Co, of Henrico County and Associated Distributors Inc. of Chesapeake have reliably turned profits by selling beer wholesale to grocery stores, convenience stores and other outlets. Their lobby, the Virginia Beer Wholesalers Association, has given more than $430,000 over the past two years to various candidates, including McDonnell, House Speaker William J. Howell (R-Stafford) and Senate Majority Leader Richard L. Saslaw (D-Fairfax). The Virginia Wine Wholesalers Association has given $235,000 to candidates over the past two years, with Howell being the biggest recipient.

Their concern is that as McDonnell spent much of the summer hammering out details of his plan, their concerns weren't taken seriously enough. They have some rather large fears about the current scheme; one of them is that when privatization begins, they will be shoved aside by big national wholesalers of distilled spirits that have ties to big-box retailers such as Wal-Mart and Costco and grocery chains such as Kroger and Food Lion.

The Virginia wholesalers want some kind of franchise protection to protect their business if privatization moves forward. Despite their substantial campaign contributions, they see a big disconnect with McDonnell. "It's almost like we're speaking English and he's hearing Chinese," Mark Stepanian, president of Loveland, was quoted as saying.

Peter Galuszka blogs at Bacon's Rebellion . The Local Blog Network is a group of bloggers from around the D.C. region who have agreed to make regular contributions to All Opinions Are Local.

By Peter Galuszka  | October 19, 2010; 1:05 PM ET
Categories:  HotTopic, Local blog network, Va. Politics, Virginia, development, economy, taxes  
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