ABC stores are commercial operations, often located in strip malls
ABC stores are now standard self-service, customer-based facilities
In stereotypes about the "Old South," rich folks stand on the plantation veranda near the boxwoods, leaning on the tall white columns with the brick house behind them and casually sippin' mint juleps brought by servants on silver platters. Gone With the Wind was set in Georgia, but the scenes on the plantation (Tara) reflected the lifestyle of high society of Virginia as well.
Fast forward to the first Monday in November, then jump one more day to Tuesday. If you want to go buy some bourbon for a modern mint julep, you have to go to a state-run liquor store... and it will be closed.
The first Tuesday after the first Monday in November is always Election Day in Virginia, every year. (In even-numbered years, registered voters choose 11 different representatives to the US Congress. Every 6 years, the race for one U.S. Senate seat is on the ballot. In odd-numbered years, all 100 seats for the House of Delegates are on the ballot. Every 4 years in odd-numbered years, voters make decisions on all 40 seats for the State Senate.) The state has decided that booze and elections don't mix - and the Commonwealth of Virginia controls the sale of hard liquor.
The Virginia Department of Alcoholic Beverage Control (ABC) has a monopoly on the sale of hard liquor in Virginia. The hours of operation, the products carried, the price, and the locations of ABC stores are government decisions. To reduce the chance that voters might be swayed by liquor, the ABC stores are closed on election days.
All liquor in Virginia is sold in over 350 "ABC" stores, managed by the Department of Alcoholic Beverage Control. Virginia started control of alcohol sales after Prohibition ended. In 1933, over 60% of Virginians voted in favor of ending prohibition and creating a state-controlled monopoly to manage liquor distribution and sale.
Virginia was the 29th state to ratify the 21st Amendment to the US Constitution ending Prohibition. Within two months of the Virginia vote, Utah became the 36th to ratify. Virginia authorized retail stores to sell beer and wine (over 16,000 retail licenses today), but set up state-run ABC stores with the exclusive right to sell hard liquor directly to the public and for sale to restaurants/bars.1
The Virginia Administrative Code still limits advertising that uses the words Bar Room/Saloon/Speakeasy/Happy Hour, hoping to minimize the potential for excessive drinking - and wholesalers are not allowed to deliver beer/wine on Sundays "except to boats sailing for a port of call outside of the Commonwealth, or to banquet licensees."2
Billboard advertising of alcohol is now permitted, but billboards:3
The top 10 products sold in ABC stores (based on total dollars, rather than total volume) are:4
|1||1||Jack Daniel's 7 Black||Tennessee whiskey|
|2||2||Smirnoff 80||domestic vodka|
|3||4||Jim Beam||straight bourbon whiskey|
|4||3||Grey Goose||imported vodka|
|5||5||Crown Royal||Canadian whisky|
|8||7||Captain Morgan's Spiced||imported rum|
|9||11||Hennessy VS (1)||Cognac\Armagnac|
|10||9||Bacardi Superior||domestic rum|
The ABC monopoly generates substantial revenues for the state. The state excise tax is 20% on distilled spirits and 4% on wine, and the ABC stores also charge 5% sales tax. In the fiscal year ending June 30, 2014, the Department of Alcoholic Beverage Control sold $801 million of product. The ABC monopoly also generate massive profits by buying alcohol at wholesale rates and selling at retail prices, generating a profit of $140 million in 2014.5
In the fiscal year ending June 30, 2012, three of the four top-selling ABC stores were located in Virginia Beach - a key destination for tourists. Store No. 256, in the Hilltop North Shopping Center, was the king of Booze in Virginia:6
If the state tries to make too much profit from its retail markup, customers can not go to a competitor down the street. Because the state ABC stores are the only legal places for selling hard liquor by the bottle, customers must travel across the state line to find a different price on hard liquor.
To limit that competition, Section 3VAC5-70-10 of the Virginia Administrative Code prohibits importing more than one gallon of alcoholic beverages from outside the state or from military posts with PX stores. Many Virginians working in Washington DC who plan to "stock up with cheap liquor for a party" have heard rumors of ABC agents staking out DC liquor stores, then tailing cars with Virginia plates back across the Potomac River to enforce the one-gallon import limit...
In 2010-11, Goveror Robert McDonnell tried to abolish the system of state control and privatize alcohol sales, eliminating the state monopoly on the sale of hard liquor. In the original proposal, 1,000 retail licenses would have been auctioned, tripling the number of outlets in Virginia for liquor sales. Wholesale operations would also be shifted to the private sector, and the state would sell the main ABC warehouse at 2901 Hermitage Road in Richmond (known locally as "Alcohol and Broad"). The governor claimed privatization would generate $500 million, which would be used to finance transportation projects.7
However, the governor's proposed new tax on restaurants selling alcohol was unpopular among conservatives. When the governor modified his plan and dropped that tax, outside reviewers determined that privatizing the entire ABC operation would not be revenue-neutral.
After the one-time surge of funding from selling 1,000 licenses, the state would end up receiving $47 million less annually. In the end, the General Assembly killed the proposal in February, 2011 without a hearing. The governor found a different way to raise taxes that financed his transportation agenda.8
Virginia has permitted sale of "liquor by the drink" in food establishments (as opposed to whole-bottle sales in ABC stores) only since 1968. Restaurants and the entertainment industry lobbied for that change in the 1960's. Liquor by the drink eliminated the "brown bag" requirement that customers join a private club and bring their own bottle to the restaurant in order to enjoy a drink before a meal.
Not every community in Virginia allows alcohol sales. In some rural Virginia counties, there have been odd alliances of religious opponents opposed to the use of alcohol and moonshiners who wanted to protect their business from legalized competition. Since 1968, however, the lure of additional tax revenue from ABC payments and especially from restaurants selling liquor by the drink has overcome the opposition in nearly every jurisdiction.
100% of the cities are "wet," reflecting the influence of the hospitality industry in urbanized areas. Between 2001-2012, the number of "dry" counties had shrunk from 35 to 10. Remaining "dry" counties were
Appomattox, Bland, Botetourt, Buchanan, Campbell, Carroll, Charlotte, Craig, Dickenson, most of Floyd, Franklin, Giles, Grayson, Green, Halifax, Henry, Highland, King William, Lee, Louisa, Lunenburg, Mecklenburg, Montgomery, Patrick, Pittsylvania, Pulaski, Russell, Scott, Smyth, Surry, Tazewell, Warren, Washington, Wise, and Wythe.9
The Little River District of Floyd County, one of the magisterial districts in the county, went "wet" in 1996. Voters in that district had rejected alcohol sales in a 1991 referendum, but changed their mind five years later. Only one restaurant, Ray's, sold liquor-by-the-drink consistently after the vote.
In 2013 entrepreneurs creating a legal moonshine distillery, Five Mile Mountain, discovered the limits on alcohol sales in Floyd County would prohibit serving their product to customers. The distillery owners partnered with local restaurants seeking the opportunity to sell alcoholic drinks to diners, and arranged for a referendum to authorize liquor sales in the Courthouse District (including the town of Floyd with its restaurants). In 2014, voters approved liquor sales in the Courthouse District.
That decision led to several restaurants getting ABC licenses for liquor-by-the-drink sales. It also led to the opening of the first ABC retail store in Floyd County.
Under state law, restaurants must purchase their liquor from ABC stores for resale to customers. Food and all other items used in restaurants/bars can be purchased directly from wholesalers, but in Virginia hard liquor must be bought at the ABC store. Ray's in the River District had to drive to an ABC store in another county to purchase its liquor, but the state chose to open a store in the Courthouse District after the 2014 vote led to an expansion of the number of restaurants with ABC licenses. That ABC store sells to individuals as well. When it opened in 2015, people could purchase a bottle of hard liquor in Floyd County legally for the first time since Prohibition.10
in Floyd County, only the Little River district and the Courthouse district (including the Town of Floyd) have authorized sale of liquor-by-the-drink
Source: Floyd County, iGIS
Virginia's Native Americans did not make alcohol, so it was a popular trade item once European colonists arrived. The colonists had a long tradition of making beer, distilling liquor from local fruit, and importing rum made from sugar cane grown on the Caribbean islands:11
Cider from fruit and beer were brewed at home, primarily by women in household kitchens through the 1600's. The low-alcohol product was difficult to store, so alcohol was traded through a barter system where different chores were exchanged. In the mid-1700's, the colonists found an economic reason for large-scale distillation of hard liquor, which could be stored easily compared to beer/cider.12
After passage of a law in 1730 to create tobacco inspection warehouses, new towns developed in Tidewater. Scottish merchants came to Virginia to buy tobacco directly from the planters and especially the small farmers. The tobacco-buying Scottish merchants established small stores on Tidewater rivers to sell items to the small farmers.
The small farmers no longer needed to ask large planters to order items from England as a favor, and to wait up to 18 months for delivery. The farmers had traditionally purchased brandy from the large planters who could afford settng up a distillery. The Scottish merchants converted the farmers' credit for their tobacco sales into quick profits from the sale of merchandise to those farmers - including brandy and hard liquor in wooden casks.
Large planters such as George Washington typically sold their crop through "factors," representatives in England who charged high prices to sell hogsheads delivered to England and buy manufactured goods and luxury items as requested by the large planters. Alexander Henderson of Dumfries is known as the "Father of Chain Stores" because he opened multiple stores in separate locations to dominate business with small farmers from Stafford County to Alexandria.
The new towns also created a market for commercial sale of liquor at taverns. Alcohol production was "re-gendered" out of the kitchens dominated by women, and became a responsibility of men working in distilleries built for that particular purpose. George Washington built his in 1797, speculating that he could convert rye and corn selling at a low price into a more-profitable product. When he died in 1799, Washington's distillery was the largest in the United States.13
Washington was well-versed in the economics of converting grain into alcohol. One of the major challenges that he faced in his second term as president was the 1794 Whiskey Rebellion in western Pennsylvania. Farmers in the Ohio River watershed struggled to make a profit shipping grain east to market in Philadelphia; roads across the mountains were poor. Distilling whiskey made it far easier to transport a high-value product that would not spoil.
Washington's Secretary of the Treasury (Alexander Hamilton) convinced the US Congress to impose an excise tax on whiskey, to raise revenue to fund the Federal government. The western farmers felt the tax unfairly discriminated againt them, while tax revenues were used to benefit people living on the eastern side of the mountains. Pennsylvania farmers revolted to block tax colection, while officials in the new state of Kentucky took a simpler approach: they just refused to collect the excise tax.14
The economics of Pennsylvania and Kentucky applied to western Virginia as well. Distilling became a tradition in the Blue Ridge of Virginia, as small farmers converted high-volume, low-value wagonloads of grain into easy-to-transport barrels of whiskey. When Prohibition blocked sale of alcohol through official channels, liquor production continued, and was called "moonshining" because in theory the stills were heated at night when smoke would not be so visible.
Virginia started banning alcohol sales in 1903, when the Mann Act essentially limited sales to just urban areas. The entire state voted in favor of Prohibition in 1914, and it went into effect on October 31, 1916. Prohibition ended in Virginia in 1934.15
In 1935, the Sunset Hills dairy farm in western Fairfax County had plenty of grain, so it opened a distillery in a building that was once the town hall for Wiehle. The building had also housed the Wiehle Methodist Episcopal Church; the steeple was removed when the building was converted into a distillery.
The dairy cows ate the grain after it was used to make "Virginia Gentleman" and "Fairfax County" whiskey; the family claimed it has "the most contented cows in Virginia." Sale of the most of the Bowman farmland in the 1960's for development of Reston forced up land prices and taxes, and in 1988 the A. Smith Bowman distillery relocated to Fredericksburg.16
For years, Bowman operated the only licensed distillery in Virginia. After the General Assembly loosened the laws on farm wineries and allowed them to charge for tastings, the number of wineries in Virginia exloded. Tourism increased in rural areas near major highways, stimulating the economy and generating revenue for local governments.
Based on that model, the state also revised the laws and regulations to spur new distilleries, and by 2014 six craft distilleries were licensed in Virginia. Belmont Farm Distillery in Clarke County now sells "White Lighning" products - legally, in ABC stores.
legal liquor is marketed with a nod to Viginia's moonshining past...
Source: Belmont Farm Distillery, Virginia Lightning
former Bowman distillery - and former Wiehle town hall/Methodist church - at Sunset Hills farm (now Reston)
Source: Virginia Department of Historic Resources, Bowman Distillery 029-5014