From the Archives: Interview with Virginia Governor Bob McDonnell on ABC privatization - Part 2

Examiner.com exclusive: Interview with Virginia Governor Bob McDonnell on ABC privatization - Part 2
August 8, 2010 2:45 AM MST

Just before the first of eight town hall meetings he is hosting around the state, Virginia Governor Bob McDonnell sat down in Roanoke with the Charlottesville Libertarian Examiner for an exclusive interview.

As a Republican candidate for governor in 2009, McDonnell had promised to privatize the state’s system of alcoholic beverage control (ABC), which includes government ownership of liquor wholesale and retail operations. The system dates to 1934, after the passage of the 21st Amendment to the U.S. Constitution, which ended alcohol Prohibition.

Unlike distilled spirits, beer and wine are sold privately, through both wholesalers and retailers, in Virginia.

Answering Opponents
In continuing the conversation about ABC reform, McDonnell was asked about opponents of privatization, which may include beer wholesalers and others who fear competition in a free-market environment.

“Once the proposal is announced,” he said, adding “on exactly what the right mechanics are, it will then go to my government reform commission.”

After getting input from the commission and from citizens, the administration “will address some of the concerns that people have,” such as fears that money will be taken from the state’s general fund and that there might be an increase in crime in the absence of direct government control of liquor sales.

Privatization, McDonnell said, “maximizes the competition to reduce price, increase quality, [and] increase convenience. I think everybody will have a fair shake at getting a distribution license. We’ll still have strong enforcement of the rules; it will just be done by a private vendor, not by a government monopoly.”

Addressing the concerns of beer wholesalers and others who fear competition, he said, “at the end of the day, if people think that somehow this privatization might not be good for their business, then maybe they’ll still be opposed to it. But we’re going to knock down most of the opposition”

Creating and Retaining Jobs
McDonnell believes strongly that privatizing the ABC system will create jobs, but he also believes a new system will accommodate current ABC workers.

“We have 2,500 employees right now that work in the state system for ABC. We think they’re good employees,” he asserted. New, private-sector vendors “will have every incentive to try to hire the government workers.”

Rick Sincere interviews Bob McDonnell

McDonnell said, “it’s obvious” why the new owners will want to retain most of the current workers. “They’re trained, they know the system.”

Beyond job creation, however, the emphasis on McDonnell’s mind is what he calls privatization’s “biggest benefit”: an immediate windfall of “$500 million or more for transportation.”

Over the past several years, he said, “there’s been a lot of discussion about transportation and many proposals have failed.”

Unlike those, this proposal, McDonnell said, “is one that uses the free market, gets the government out of business, [creates] smaller government [and] more competition, and generates a half a billion for transportation.

“To me,” he concluded, “that’s a win-win and I think it’s one of the biggest reasons we’ll have public support for this idea.”

Part 1 of Governor McDonnell’s interview with the Charlottesville Libertarian Examiner is available on Examiner.com. See the attached video for a complete recording of the conversation.

Publisher's note: This article was originally published on Examiner.com on August 8, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.