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Alcohol sales up in Virginia

By Michael Felberbaum - AP Business Writer

RICHMOND -- Virginians bought more alcohol in the state's beverage control stores and restaurants as the state agency saw a record profit in the last fiscal year.

The Virginia Department of Alcoholic Beverage Control said the agency has seen retail sales increase to record levels consecutively for the past 14 years, even as discussions continue about privatizing the state's liquor stores. The agency that runs more than 335 shops said it saw a record profit of $132.1 million in the last fiscal year and has contributed $1.7 billion to the state's general fund during the last five years.

According to the agency's most recent annual report, gross wholesale and retail sales increased nearly 6 percent to $734 million for the fiscal year that ended June 30. The number of cases of wine, spirits and nonalcoholic mixers sold increased more than 5 percent to about 4.19 million cases. That translates to more than 51 million bottles, or about 10.2 million gallons.

"There is something to say that people continue to drink in good times and in bad, but generally speaking as the economy improves, people have more disposable income to spend on entertainment, so we get a lift from that," said Curtis Coleburn, the agency's chief operating officer.

Sales at the about 130 state-run liquor stores open Sundays increased about 4 percent. As of July 1, nearly all of the stores are open on Sundays.

The number of transactions at the state-owned stores increased by nearly 5 percent to 26.6 million and sales to restaurants increased about 4 percent compared with the previous year.

Sales of vodka increased about 8 percent to more than 1.4 million cases, with four brands in the top 10. Sales of flavored vodka, ranging from bacon to cotton candy, increased nearly 24 percent. But Jack Daniel's whiskey remained the top-selling brand in Virginia based on dollar figures.

The 2012 fiscal year was the second year Virginia law allowed companies to conduct product tastings in the state-run stores. About 3,120 tastings were held during the year, but officials said they were unable to quantify how successful the tastings were at driving sales. Companies are allowed to sign up to hand out samples of 1.5 ounces -- or about a shot -- of distilled spirits to customers.

The agency also said in its annual report that it remains committed to reducing sales of alcohol to minors. Employees at state-owned liquor stores check about 2.2 million identification cards each year, yielding a 99 percent compliance rate. And compliance rates for licensees like restaurants and bars fell slightly from 90 percent to 87 percent.

The latest alcohol sales figures for Virginia come amid failed attempts over the past few years by Gov. Bob McDonnell to put state-owned liquor stores into private retailers' hands, noting that free market booze could generate tax money for roads.

Spokesman Tucker Martin said McDonnell continues to support privatizing the state's liquor stores but will not have legislation in the General Assembly session set to begin Jan. 9, saying the governor "believes the sale of alcohol in any form, whether it be beer, wine or liquor, should be left to the private sector."

"It is smart public policy ... It is not a core function of government," Martin said.


Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum .


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