Privatization of ABC Stores Fails Again
By Steve Flowers
Alcohol was on the minds of many Alabama lawmakers this year as the legislature considered an abnormally high number of alcohol-related bills. Several of the bills passed. Most notable was legislation that made it possible for Alabama businesses to deliver beer, wine and liquor to customers’ homes, and separate legislation that allows state residents to order wine directly from wineries, even if those producers are out of state.
One piece of legislation that did not pass was Senator Arthur Orr’s perennial bill to privatize ABC liquor stores. There are a number of reasons for Alabamians to be thankful this legislation did not pass.
First and foremost, the State’s General Fund Budget will benefit from the failure of this legislation. The proposed legislation would have resulted in higher prices, lost tax dollars, lost jobs and less enforcement of alcohol laws. For example, last year alone the Alabama Alcoholic Beverage Control Board, contributed $314 million to the State General Fund and state agencies, according to information provided by the ABC Board. This is from taxes and the markup on liquor.
If you privatize liquor sales and close the ABC stores, much of this revenue goes away, even after considering the taxes generated by private stores. An analysis of the ABC Board shows a net loss of $95 million a year.
Another reason to be thankful the legislature refused to privatize liquor sales, is the fact that hundreds of state jobs were saved by the failure of this legislation. The ABC stores and the state warehouse are run by more than 875 state employees. Most would have lost their jobs, their health insurance and their retirement had the bill passed.
These employees go through hours of training to keep stores safe and prevent the sale of liquor to minors. Dollars and cents aside, if you look at this from a health and safety standpoint, Alabama is better off with state regulated ABC stores controlling liquor sales than private retailers.
Speaking of private liquor stores, you can expect a big jump in their numbers. If you consider all the grocery stores, convenience stores and other retail chains, such as Walmart and Target, along with the additional package stores that will pop up if liquor sales are privatized, liquor outlets in the state could increase from around 850 currently to more than 2,100. While there would not literally be a liquor store on every corner, it sure might feel like it.
Furthermore, studies and common sense indicate that the more stores you have selling liquor, which will come with privatization, the more liquor you are going to sell. More sales mean more consumption, and more consumption means more health and safety problems. Alcohol is not just another commodity and buying it should not be as easy as buying milk and bread. Data from the CDC says 95,000 people die annually due to excessive drinking. No drug kills as many people each year as alcohol.
The good news is that under our current alcohol control system, Alabama fares much better than most states when it comes to alcohol consumption. As a state, we are among the lowest in liquor consumption and among the highest in revenue from liquor taxes.
Lastly, even if you look at privatization from a consumer’s standpoint, it does not benefit Alabamians financially to privatize liquor sales. As anyone who has gone into an ABC store and a private package store knows, private store prices are much higher. If you close the ABC stores, Alabamians are only left with the higher prices of private stores.
While the legislation to privatize liquor sales was well intentioned from a philosophical standpoint, we should be thankful our legislature looked at the bigger picture. The state has little to gain, but a lot to lose by closing ABC stores.
The ABC Board is a valuable state agency, and the ABC stores provide a great benefit to our state in tax revenue, hundreds of state jobs and lower prices for Alabamians.
I have known ABC Board Administrator Mac Gipson a long time. I know he runs a tight ship and it would be a shame to wreck it, so let’s hope privatization of liquor sales is dead for good.
See you next week.
Steve Flowers is Alabama’s leading political columnist. His column appears in over 60 Alabama newspapers. He served 16 years in the state legislature. Steve may be reached at: www.steveflowers.us.
