Looking to pick up support, McDonnell staff offering tweaks to ABC plan
Gov. Bob McDonnell's policy director told Virginia's convenience store association this week that the governor is considering a proposal to let retailers finance their bid offers for licenses to sell distilled spirits as part of his plan to privatize the state's liquor monopoly.
That's according to Michael O'Connor, lobbyist for the Virginia Petroleum Convenience and Grocery Association, which represents 4,400 convenience stores and gas stations in Virginia.
McDonnell has proposed creating 1,000 licenses for private retailers interested in selling booze in place of the state's 332 Alcoholic Beverage Control stores. The licenses would be divided into three categories -- 600 for big-box stores, 150 for freestanding package stores and 250 for convenience and drug stores -- and retailers would bid against one another for a license. McDonnell has estimated that the state would earn at least $265 million from the auction by setting minimum bids for licenses.
Minimum bids so far proposed by McDonnell would vary by license type and geographical area but would reach into the hundreds of thousands of dollars for all interested retailers. And that has raised concerns that smaller and family-owned Virginia businesses will have trouble cracking the market and will be shut out by big chains such as CVS and Wal-Mart.
But Eric Finkbeiner, McDonnell's ABC plan guru, told the board of the association Monday that one way to allay that fear would be to allow retailers to finance their bids, with winners paying for licenses over a number of years, O'Connor said.
Finkbeiner also said a revised privatization plan might give Virginia-based companies credits in the auction, giving them an edge in a competition against out-of-state businesses.
The tweaks could be proposed as early as Thursday's meeting of the subcommittee of McDonnell's Government Reform Commission that is considering the ABC proposal.
"They're looking at some changes. I got the impression that there would be some announcements or proposals tomorrow," O'Connor said. "But this thing is such a moving target."
The association so far has no official position on the plan, O'Connor said, though it previously supported a move by Virginia retailers to ask that the legislature's audit arm examine the idea. He said Finkbeiner made it clear that the governor's office is interested in the group's support.
Finkbeiner's comments to the convenience store owners is a sign that the governor's office, which has always presented the plan it put forward on Sept. 8 as a work in progress, is actively looking for tweaks that could help it pick up support.
McDonnell's conundrum is that changing the complex proposal to satisfy one group is likely to cost support from another.
Allowing bids to be financed, for instance, could help McDonnell pick up votes from legislators who have been concerned about the small-business issue. But it also would likely cut into the $458 million in upfront cash the governor has said the plan would produce for transportation.
McDonnell spokeswoman Stacey Johnson had no comment.
| September 29, 2010; 11:30 AM ET
Categories: Liquor privatization, Robert F. McDonnell, Rosalind Helderman
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