ABC stores are commercial operations, standard self-service customer-based facilities often located in strip malls
After Prohibition ended, Virginia authorized retail stores to sell beer and wine (over 16,000 retail licenses today), but retained direct control over the sale of hard liquor. The General Assembly set up what is today the Virginia Alcoholic Beverage Control (ABC) Authority and gave it the exclusive right to sell hard liquor directly to the public.
After Prohibition the state allowed the sale of wine and beer in numerous places. Today, various forms of wine and beer are sold at the 7-11, the grocery store, and even gas stations that obtain the required ABC license for off-premise sales. Those stores compete for customers by offering different prices, hours of operation, and levels of service.
Until restaurants were authorized in 1968 to sell liquor by the drink (one glass at a time), the only legal hard liquor sales in Virginia were bottles handed by ABC clerks to customers standing on the other side of counters in state-owned stores.
The Virginia Alcoholic Beverage Control Authority issues on-premises licenses restaurants to serve beer, wine, and since 1968 hard liquor. Restaurants have competitive business practices, but the state has limited their ability to sell alcohol at a discount.1
At one time, the Virginia Administrative Code also limited advertising that uses the words Bar Room/Saloon/Speakeasy/Happy Hour, hoping to minimize the potential for excessive drinking. Beer and wine wholesalers were 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," and retail outlets were required to purchase their beer/wine through wholesale distributors that are regulated by the state.2
Billboard advertising of alcohol is now permitted, but billboards:3
In contrast to retail sales of wine/beer and the sale of hard liquor by the drink in restaurants, the only competition for the sale of bottles of hard liquor in Virginia comes from moonshiners selling untaxed and illegal liquor in plastic one-gallon jugs or even in the classic Mason jar container. No matter what the size of the bottle, the state has a near-monopoly on the legal sale of rum, vodka, bourbon, etc. through 350 state-owned and state-operated ABC stores. Whenever hard liquor is sold in bottles legally in Virginia, that alcohol is sold in a state-run ABC store or in a "distillery store" with an ABC license.
Counties and cities in Virginia can ban the sale of alcohol, but the General Assembly can overturn such limits. The hours of operation, the brands sold, the price of different products, and the locations of ABC stores are state rather than local decisions. Customers who want buy a bottle of bourbon for a modern mint julep (perhaps pretending it was brought by servants on silver platters to their plantation veranda near the boxwoods...) go to a state-run liquor store, or to a stqate-licensed distillery.
In most cases, it would be a short trip to buy a bottle. The Department of Alcoholic Beverage Control claims that an ABC store is located within a 10--minute drive of 92% of Virginians.4
ABC stores are scattered across Northern Virginia in all jurisdictions, but Lee County forbids sale of alcohol - so someone living at Cumberland Gap (near Middlesboro, Kentucky) would have to drive over an hour to the ABC store in Big Stone Gap (in Wise County) or in Gate City (in Scott County) to purchase a bottle of hard liquor legally in Virginia
Source: Virginia Alcoholic Beverage Control Board, ABC Store Finder
All ABC stores used to be closed on one day each year when elections were held. Store shut down on the Tuesday after the first Monday in November, in addition to the traditional holiday closings on Thanksgiving, Christmas Day, New Year's Day and Easter. Sales stopped because the state had decided that bottles of hard liquor and elections do not mix. Closing the ABC stores was expected to reduce the chance that modern voters might be swayed by liquor.
That first Tuesday after the first Monday in November is always election day in Virginia, every year. In odd-numbered years, all 100 seats for the House of Delegates are on the ballot. Every 4 years in odd-numbered years, voters also make decisions on all 40 seats for the State Senate. In even-numbered years, registered voters can choose one of the 11 different Representatives who serve in the US Congress. Every 6 years, the race for one U.S. Senate seat is on the ballot.
The now-repealed election day closure of ABC stores contrasted with the confluence of drinking and voting in colonial elections. In the 1700's, candidates in Virginia offered alcoholic punch to voters throughout election day.
The free drinks offered to all voters gave rural farmers a rare opportunity to gather, see their neighbors, and party at the expense of the candidates. Voting in Virginia was by "open outcry" (viva voce), not by secret ballot, until after the Civil War. Voters would approach the sheriff and announce their decision, and candidates and onlookers heard each vote announced. Candidates who failed to provide any alcoholic rewards for participating in the process could be punished by the voters.
James Madison lost only one election in his life, in 1777, when he failed to offer Orange County voters any refreshments on election day. George Washington was rejected by the voters of Frederick County in 1755 when he first sought election to the House of Burgesses. One reason for the rejection was his opposition to local taverns selling alcohol to the Virginia Regiment troops. Washington led the militia from his headquarters in Winchester at the start of the French and Indian War, and his major discipline challenges were exacerbated by the easy availability of booze.
In George Washington's second attempt at office in 1758, he made sure to treat the voters liberally to honor their participation in the electoral process and to obtain their support. He provided about 150 gallons of beer, hard cider, punch, and rum to entertain 391 voters. Simple math suggests that they drank heavily throughout the day, or shared with others who took advantage of Washington's hospitality.5
for most of the 20th Century, ABC stores were drab facilities that required customers to order liquor from clerks at a counter, rather than self-service stores with customer-friendly lighting and displays
Source: Virginia Alcoholic Beverage Control Board, Image Bank
The liquor monopoly generates substantial revenues for the state. The state excise tax is 20% on distilled spirits and 4% on beer/wine, and the ABC stores also charge 5% sales tax. In 2018, the Department of Alcoholic Beverage Control was reconstituted as the Alcoholic Beverage Control Authority, giving it greater flexibility in running a for-profit operation. That year, for the first time the state generated over $1 billion in revenue from the ABC stores where hard liquor was sold.
Alcohol sales in FY2019 generated $500 million in state revenue - $198 million in profits from retail sales at ABC stores, $223 million in taxes on alcohol sold in those stores, and $80 million from taxes on wine and beer sold in other stores. That reflected a steady increase due to opening more stores, and keeping stores open for longer hours (including Sunday mornings).6
profit and loss projections assume a steady growth in sales exceeding 4%, in part by opening eight new stores each year
Source: Virginia Alcoholic Beverage Control Board, Virginia ABC Overview of Operations and Budget
The top 10 products sold in ABC stores (based on total dollars, rather than total volume) have been:7
|1||1||1||3||6||13||21||40||40||Tito's Handmade||domestic vodka|
|2||2||2||1||2||4||7||9||11||Hennessy VS (1)||Cognac\Armagnac|
|3||3||3||2||1||1||1||1||1||Jack Daniel's 7 Black||Tennessee whiskey|
|4||4||4||4||3||5||3||3||4||Jim Beam||straight bourbon|
|6||6||6||5||4||2||2||2||2||Jameson Irish||Irish whiskey|
|7||7||10||11||14||15||17||18||22||Crown Royal||Canadian whisky|
|8||8||9||9||10||11||11||11||12||Fireball Cinnamon||Canadian whisky|
|9||9||7||7||8||7||6||5||5||Smirnoff 80||domestic vodka|
|10||10||8||8||7||6||4||4||3||Maker's Mark||straight bourbon|
|11||11||11||12||11||10||13||13||14||Grey Goose||imported vodka|
|12||12||12||10||9||8||8||6||6||Bacardi Superior||domestic rum|
|14||19||19||20||19||39||-||-||-||Crown Royal Regal Apple||Canadian whisky|
|15||18||17||17||17||17||14||14||-||Jose Cuervo Especial Gold||tequila|
|16||16||18||23||27||37||43||-||-||Woodford Reserve||straight bourbon|
|17||14||14||15||15||14||12||8||7||Captain Morgan's Spiced||rum|
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:8
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, Governor 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.9
the central warehouse ships bottles of hard liquor to the 350 or so local ABC stores
Source: Virginia Alcoholic Beverage Control Board, Image Bank
The governor's proposed new tax on restaurants selling alcohol was unpopular among anti-tax conservatives in the General Assembly. 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 initial 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 in 2013. Five years later, the 2018 General Assembly authorized sale of the ABC headquarters and warehouse in Richmond. The state decided to move the facilities to Mechanicsville in Hanover County, near the intersection of pole Green Road and I-295.
The agency was cooperative. The shift in location gave Alcohol Beverage Control the opportunity to implement modern technology in a four new warehouse totaling 778,000 square feet, plus a new office building. The most important factor in relocation, however, was to free up the land occupied by the warehouse and offices at 2901 Hermitage Road.
Making it available provided greater flexibility for replacing the baseball stadium next door, built in 1985 and known as The Diamond. The Atlanta Braves moved Richmond's AAA minor league team to Georgia in 2009, after playing for 43 years in Richmond. Gwinnett County built a new ballpark after Richmond could not commit to replace The Diamond. After recruiting a AA team known as the Flying Squirrels, the city negotiated a deal for them to stay in Richmond for 30 years if a new stadium was constructed.
Virginia Commonwealth University and the Flying Squirrels developed a plan to build a new $55 million shared stadium. The university would also construct an Athletics Village, with sports medicine and other academic programs. The General Assembly supported the plan by moving the Alcohol Beverage Control to Hanover County and giving Virginia Commonwealth University first rights to purchase the state-owned land at fair market value.10
moving the Alcohol Beverage Control headquarters on Hermitage Road made space for replacing The Diamond baseball stadium
Source: ESRI, ArcGIS Online
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 (typically in a brown paper bag) 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.
top-selling products at ABC stores change a little every year, as customer tastes change
Source: Virginia Department of Alcoholic Beverage Control, 2015 Annual Report and Alcoholic Beverage Control Authority, 2019 Annual Report
100% of the cities are "wet," reflecting the influence of the hospitality industry in urbanized areas. Between 2001-2015, the number of "dry" counties changed from 35 to 8. In 2016, Russell County voters approved sale of alcohol in the Town of Lebanon.
In 2019, the General Assembly changed the rules. It made all counties "wet," starting in 2020, unless local voters in a referendum acted to keep it "dry."11
At the time, the remaining 100% "dry" counties were
Appomattox, Bland, Botetourt, Buchanan, Campbell, Carroll, Charlotte, Craig, Dickenson, 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.12
officially-dry counties are concentrated in southwestern Virginia, but all counties on the I-81 corridor are "wet"
Source: US Geological Survey (USGS) National Atlas, County Map
Prior to the General Assembly changing the rules in 2019, selected portions of "dry" counties managed to get approval to serve alcohol. Some used a local referendum, while others got members of the General Assembly to sponsor special legislation that created an exemption.
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.
In Floyd County, the restaurant Ray's had to drive to an ABC store in another county to purchase its liquor. When the voters in 2014 authorized alcohol sales in the Courthouse District as well as the River District of the county, the state expected a significant increase in the number of Floyd County restaurants obtaining ABC licenses to sell liquor by the drink.
The Department of Alcoholic Beverage Control chose to open an ABC store to supply hard liquor to those restaurants, and to sell directly to individuals as well. When that store opened (in the Courthouse District) in 2015, people could purchase a bottle of hard liquor in Floyd County legally for the first time since 1934.13
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
In 2017, voters in Wise County approved a referendum to allow sale of wine and beer on Sundays, and Boone's Mill in Franklin County authorized restaurants to sell alcohol. In 2018, voters in the Town of Richlands in Tazewell County also approved the sale of mixed alcoholic beverages in restaurants by a 60%-40% majority.14
When local voters stayed reluctant to authorize sale of liquor by the drink, some entrepreneurs bypassed them by going to the General Assembly to gain approval. Legislators who did not live in that jurisdiction carried the bills granting exemptions, so local voters could not retaliate at the polls. The presumption is that the local legislator who may have wanted to do a favor for a business did some horse-trading with a legislator who lived elsewhere, providing support for some other legislation in exchange.
The 2019 legislation finally deleted that section of the Code of Virginia which included the following specific authorizations for 31 places where mixed drinks could be sold within a "dry" county:15
Kanawha Valley Arena Resort - exception (xxvii) - qualified as "property fronting Kanawha Ridge Road, located within approximately 700 feet of Route 638, and operated as a resort in Carroll County as of December 31, 2007"
Source: ESRI, ArcGIS Online
The "town incorporated in 1894 consisting of 1.9 square miles and, prior to the town's incorporation, known as Guest Station" - exception (xxvi) - is Coeburn in Wise County. The former Woodberry Restaurant, which was located within one-quarter mile of Mile Marker No. 174 on the Blue Ridge Parkway - exception (iv) - advertised that customers should imagine "strolling around the beautiful grounds after a perfectly mixed cocktail at our bar "16
selling mixed drinks on the Blue Ridge Parkway in Floyd County was a marketing opportunity for the Woodbridge Restaurant
Source: Woodberry Inn, Imagine
In 2020, when Governor Northam issued Executive Order 53 closing all dining and congregation areas in restaurants, dining establishments, food courts, breweries, microbreweries, distilleries, wineries, tasting rooms, and farmers markets during the COVID-19 pandemic, he declared beer, wine, and liquor stores to be "essential retail businesses" which could stay open.
That ensured the state would continue to receive revenue, at a time when economic disruption was forcing dramatic budget reductions. However, purchases by licensees such as restaurants dropped to zero, since those facilities were closed. Such sales typically generated 20% of the revenues.
Leaving the stores open also reflected customer priorities. Had the ABC stores closed, Virginians would have driven across the state border and purchased alcohol in the District of Columbia or in other states.17
Despite the pandemic, the Virginia Alcoholic Beverage Control Authority had a record year for profits. Sales to bars and restaurants declined as those outlets closed, then recovered as the state increased flexibility and allowed customers to order mixed beverages with takeout orders. For the 2019-20 year as a whole, sales to licensees declined 19%. However, retail sales grew 18%.
Of the total increase of $117 million in sales, $18 million could be attributed to the 12 new stores. Retail sales had already increased 7% before the pandemic, in part because of more careful selection of products being stocked. A major factor was the decision during the pandemic of customers to consume more alcohol.18
The pattern of increased consumption continued. Revenue increased over 10% between July 1, 2020-June 30, 2021, reaching $1.4 billion. The General Fund of the state budget received $616.4 million in profits. Sales to licensees - restaurants and bars - were down 15% due to the continued effects of COVID-19 pandemic, but consumer purchases steadily increased.
Standard sales techniques that increased profits included opening more stores, expanded operating hours, pricing products with sales and discounts, and offering in-store tastings. The Chief Executive Officer of the Virginia Alcoholic Beverage Control Authority credited the General Assembly's decision in 2015 to allow the organization to operate more like a business:19
into the 1970's, customers went to a counter to order bottles of liquor; there was no self-service
Source: Virginia Alcoholic Beverage Control Authority, Media Library
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
the 2018 General Assembly authorized sale of the Alcohol Control Board headquarters and warehouse on Hermitage Street in Richmond
Source: ESRI, ArcGIS Online
new headquarters and warehouse in Henrico County near Mechanicsville
Source: Virginia Alcoholic Beverage Control Authority, Media Library