Have you ever wondered why Virginia has the ABC stores all over the state and only allows distilled liquors to be sold through them, while many other states allow retail stores to sell your favorite booze?

It’s all about control. Well, that and money, of course.

When the 21st Amendment was enacted by the requisite number of states needed to end Prohibition in December 1933, it fell to the states to decide what to do next. Those states whose voters had rejected the amendment generally opted to remain “dry,” some of them for decades. Others voted to enact a variety of systems designed to make alcoholic beverages available, but generally within some limits.

Virginians had overwhelmingly approved the amendment 99,640 to 58,518 in a special election, though many rural counties, including Isle of Wight, voted against the amendment. Despite rural holdouts, it was clear that a majority of Virginians wanted the ban on liquor to end.

All well and good, but Virginia’s leadership, encouraged by religious and other community leaders, wanted to exert a significant degree of control over Demon Rum. The public pressure that had led to enact the 18th Amendment in 1919 pointed to what was considered a primary foe of an ordered society — the saloon.

Americans had always enjoyed their favorite fermented or distilled beverages, many of which had originated in their native lands and came here with the earliest immigrants. And efforts to control — and, significantly, to tax — said spirits had begun immediately. 

Prior to Prohibition, however, things had gotten pretty loose. Saloons operated with little or no governmental control, which was largely left to localities. Smithfield, for example, had three saloons on Commerce Street in 1907, according to an insurance map.

When the vote to end Prohibition was taken in October 1933, Virginia leaders were moving to create a “liquor control plan” to ease the state back into the use of alcohol. A legislative committee outlined what was to come. 

The first priority was to prevent the reestablishment of saloons. To accomplish that, there would be no liquor by the drink for distilled spirits. Only beer and wine could be served on-premises, and then only by licensed restaurants.

A state Alcoholic Beverage Control board would purchase all distilled liquors and distribute them through “dispensaries” (liquor stores) that would be built in counties and cities that wanted them. No liquor stores would be built in counties or cities that chose to remain “dry.”

Beer and wine were to be controlled by a “three tiered” system that separates manufacturers from distributors and both of those from retailers. Retailers could only buy from distributors and they would handle all goods coming from manufacturers.

The system has changed with the times, but the basics remain in place.

Anyone selling wine or beer has to be licensed. That includes restaurants, which can get an on-premises license, or grocery stores and other distribution points that can hold an off-premises license.

The biggest change in the system came when the General Assembly approved liquor by the drink. Localities had to hold referenda to approve by-drink sales, and in 1975, Isle of Wight voters narrowly approved allowing restaurants to offer liquor by the drink.

Through the maze of changing ABC regulations during the past 92 years, there has been one constant. Because it holds a monopoly on the sale of spirits, the state has always taken a cut, and it’s been a major source of revenue for state services. Today, that amounts to more than $600 million a year contributed to the state’s budget. 

For those who favor “user taxes” — and who doesn’t — it’s truly a big one.

 

John Edwards is publisher emeritus of The Smithfield Times. His email address is j.branchedwards@gmail.com.