McDonnell takes liquor plan to Bristol

BRISTOL, Va. (AP) - Gov. Bob McDonnell hawked his plan to privatize Virginia's state-owned liquor stores to a savvy crowd in this city on the Tennessee border.

For years, cheaper booze prices south of State Street -- the Tennessee-Virginia line -- have enticed many a whiskey shopper south of the border to the mom-and-pop stores instead of Virginia's Alcoholic Beverage Control outlets.

Just one block from the state line, McDonnell used the last of his eight town hall-style forums to advance his ABC privatization idea and other proposed government reforms.

The first-year governor wants to sell the 332 government-owned stores and use profits he estimates at $300 million to $500 million to maintain Virginia's underfunded highway system.

Democrats who control the state Senate balk at the proposal, questioning McDonnell's projected one-time windfall and warning that the state could lose a reliable source of $230 million in annual revenue.

The only way the state could match the money that the tightly controlled state system brings in, scoffed Senate Majority Leader Richard L. Saslaw, is to triple the sales of liquor, putting more drunks on the roads the state seeks to fix.

And some Republican social conservatives fret over a less-regulated, Tennessee-style system where stores tend to flourish in seamy areas of large cities.

Concerns also linger, until McDonnell submits final details of his plan on Sept. 8, about who would control the lucrative liquor wholesaling business.

McDonnell, however, counters that "it's not a core function of government to sell Jim Beam or Grey Goose." Virginia, he said, is one of only 18 states with a government-controlled monopoly over distilled spirits. He notes that Virginia government went into the booze business in 1934, as the nation emerged from Prohibition.

He rejects claims that the budget will suffer from free market liquor. And a Powerpoint presentation playing out on a large screen behind him shows a study that shows binge drinking won't increase as a result.

"Tennessee is a private sector (liquor) state, and they have less of an incidence of binge drinking" than Virginia, he told about 150 people in the Bristol, Va., public library.

Beer distributor Tom Hairston, whose business could face new competition, said Virginians consume 21 percent less hard liquor than the national rate. "Do we really want to catch up?" he asked McDonnell during the forum.

But James Covey of Radford supported privatization, particularly if the proceeds are used to modernize outdated stretches of Interstate 81, a ribbon of freeway that curls through western Virginia and is among the oldest stretches of the nation's interstate system.

On the streets of this two-state community, price tends to sway purchase decisions.

Jeffrey Arnold, a Virginian who lives a few feet from the state line, stopped at a Virginia ABC store in Bristol for a bottle of vodka, something he said he usually does in Tennessee.

"Well, their prices are just cheaper," said Arnold, 37. "But I like now they have more brands here, and it's a little more open. I feel a little safer."

Ben Henderson, the afternoon clerk at the Belmont Package Store in a shopping center full of vacant stores in Bristol, Tenn., sees plenty of drinkers choose his store because prices are lower and because it is open until 11 p.m., two hours after Virginia's ABC stores close.

"On average, we have better prices, but they (Virginia's stores) have a better selection," said Henderson, 22, who is working his way through a local community college.

"Our prices average about $4 or $5 less, particularly on the big stuff, the large bottles," he said.

A spot check proved Henderson right, at least on popular labels.

A 1.75-liter bottle of Stolichnaya Vodka was $34.99 at his Tennessee store. Six miles away, at a Virginia ABC store, it was $42.90.

Other comparisons of 1.75-liter bottles: Captain Morgan spiced rum, $28.99 in Tennessee, $32.95 in Virginia; Jack Daniel Tennessee Straight Whiskey, $42.99 in Tennessee, $47.95 in Virginia; J&B Scotch, $39.99 in Tennessee, $39.90 in Virginia. Jose Cuervo Gold tequila cost $29.99 in Tennessee, but in Virginia it was on sale for $37.90, down from the normal list price of $39.90.

Norman Booher has lived on the Tennessee side of Bristol all of his 60 years. For him it's an easy choice, based mostly on cost.

"I don't know why, but it used to be cheaper in Virginia," Booher said after he paid for his fifth of Tennessee's own Jack Daniel black label. "I'd just assumed that because in Virginia the state owns it, the state got better deals (from the distillers) because they bought more."

McDonnell's tentative plan would privatize the wholesale and retail operations. Virginia now controls all liquor distribution, receiving it from distillers at a central warehouse in Richmond, then dispatching the alcohol to stores statewide.