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McDonnell takes ABC privatization discussion public

Anita Kumar

Gov. Bob McDonnell (R) moved one small step closer to privatizing the state's 332 liquor stores today when his staff publicly unveiled the four possible ways they could sell off the stores.

As The Washington Post reported Sunday, the options are: selling all of the state's alcohol assets to a single company (which would offer upfront money for transportation but would not offer competition); having firms take over the state's existing stores (which would maintain annual revenues but not offer upfront money for transportation); offering licenses to the 3,000 businesses that sell beer and wine (which would offer additional annual revenues but perhaps too many stores); and auctioning an undetermined number of licenses to the highest bidder.

Eric Finkbeiner, McDonnell's policy director, told McDonnell's government reform commission, which held its second meeting on Capitol Square today, that many of those affected by privatization prefer auctioning the licenses to the highest bidder.

"That's the one that gets the most head nodding,'' he said.

McDonnell's staff estimate that proposal could bring in $300 million to $800 million, while continuing to bring in up to $220 million each year.

That proposal would probably come with an increase in the number of stores, between 400 and 1,000. Companies would be limited in the number of licenses they could buy, and some would be set aside for small, women-owned or minority-owned businesses. They would be sold by auction in three tiers to big-box stores, such as grocery stores and Wal-Mart, traditional package stores and convenience stores or drug stores.

McDonnell's government reform commission is likely to approve one of the proposals at its next meeting Aug. 26, after which McDonnell expects to call legislators back to Richmond for a special session on privatization and other cost-cutting issues.

By Anita Kumar  |  July 20, 2010; 1:47 PM ET
Categories:  Anita Kumar , Robert F. McDonnell  
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