News Release Contact:Virginia ABC Communications - (804) 213-4413
Starting Friday, July 1, five laws impacting the Virginia Alcoholic Beverage Control Authority (ABC), its licensees and applicants for ABC licenses will take effect. The Virginia General Assembly passed the following Virginia ABC-related legislative proposals during the 2022 session, and Governor Glenn Youngkin signed them into law.
Third-Party Delivery License/Cocktails To-Go (HB 426 and SB 254) – Both bills create a third-party delivery license which will be necessary to deliver alcoholic beverages purchased by consumers from retail licensees. Created to address safety issues including age verification and food requirements, the new license requires delivery personnel to pass an alcohol delivery safety and responsibility course and certify their compliance with the regulations annually. In addition, the bills extend from July 1, 2022, to July 1, 2024, the sunset of prior legislation that allowed certain licensees to sell mixed beverages for off-premises consumption.
Alcohol Licenses for Casinos (HB 455 and SB 519) – Both bills create a new mixed beverage casino license for the sale of alcoholic beverages for on-premises consumption in areas designated by ABC during all hours of operation. It also authorizes the licensee to provide gifts of alcoholic beverages to patrons and establish loyalty or reward credit programs under certain conditions.
Funding for Virginia Distilleries to Market their Products (HB 20 and SB 196) – Both bills allocate from the General Fund an amount equal to 20% of the 20% tax levied on the sale of Virginia-distilled spirits to the Virginia Spirits Promotion Fund.
Bringing Alcohol from Out of State (SB 325) – This law increases the amount of alcoholic beverages that a person may transport into the commonwealth from one gallon to three gallons.
Removing Sunset Clause for the Sale of Grain Alcohol (SB 527) – This bill removes the sunset clause from the authorization for the sale of neutral grain spirits or alcohol up to a proof limit of 151 in ABC stores
June 09, 2022 News Release
Contact:Virginia ABC Communications - (804) 213-4413
New ABC License Effective July 1 Looks to Ensure a Safe Means for Alcoholic Beverage Delivery
A new license designed to ensure a safe and secure way for licensed businesses to deliver alcoholic beverages will take effect on July 1. The new third-party delivery license, which was part of legislation passed by Virginia’s General Assembly and signed into law by Governor Youngkin earlier this year, requires delivery personnel to pass an alcohol delivery safety and responsibility training course.
Virginia Alcoholic Beverage Control Authority’s (ABC) Education and Prevention team has created the Responsible Alcoholic Delivery Driver (RADD) online public safety course, which is offered at no charge for licensees and businesses seeking a third-party delivery license. The course includes a pretraining survey, four training modules and a success survey. Training topics include alcoholic beverage delivery strategies to prevent underage sales and promote responsible consumption.
The third-party delivery license is the result of a stakeholder study group that met during the summer of 2021 to address safety concerns about the new alcohol delivery service. Representatives from food and beverage delivery businesses; alcoholic beverage manufacturing, retail and wholesale companies; and restaurant and hospitality industries; as well as Virginia ABC leadership contributed to the collaborative effort to create the license designed to protect public safety and health.
As part of the study, representatives from third-party delivery services participated in a workgroup to create a licensing structure for Virginia. The group brought experiences from other states and industry best practices, which were significant in the creation of the license.
“Virginia ABC was most appreciative of the earnest and candid input from the approximately 40 stakeholders in this group,” said Virginia ABC CEO Travis Hill. “We were pleased that state lawmakers took the two-pronged approach of continuing the cocktail to go privilege while also creating the license for third-party delivery entities to better assure safe and lawful delivery of alcohol. In the ensuing years, ABC will continue to monitor delivery of alcohol to determine if further policy changes are required.”
The new third-party delivery license, which addresses issues including age verification and food requirements, stipulates that licensees annually certify their compliance with the new regulations, including delivery personnel’s completion of the training course.
Seller Training Approval Program (STAP) for alcohol delivery personnel trainings developed by entities other than Virginia ABC are also accepted for certification. Virginia ABC's certification of delivery driver public safety trainings started June 1 and will continue through July 15, 2022. The application form, training criteria and submittal instructions are available on ABC’s website. For more information about these trainings, contact ABC Education and Prevention at firstname.lastname@example.org or 804-977-7440.
More information about the third-party license requirements is available on Virginia ABC’s website.
ABC will allow two telework days per week for HQ workers
Virginia Business, Kate Andrews
Employees at the Virginia Alcohol Beverage Control Authority’s Mechanicsville headquarters will be returning to in-person work three days a week, not the four or five days a week that will be required of many state workers beginning July 5, following Gov. Glenn Youngkin’s telework order earlier this month.
Virginia ABC CEO Travis Hill sent an email to ABC employees Thursday, noting that the plan to work in person at the authority’s new Hanover County office three days a week, with two days working remotely, is “the final part of our return to office strategy, originally announced in August 2021 and reaffirmed last December. This approach was based on survey feedback from employees and our long-term operational needs and completes a six-month effort on returning to the office.”
Hill, who was appointed by former Gov. Ralph Northam to lead the ABC in 2018, notes that as an authority instead of a state agency, the ABC has “greater latitude in how we manage our telework and hybrid work status.” The memo also says that the authority will use a new telework agreement form distributed by Youngkin’s office, and that all applications will be due June 15.
“All employees choosing to work a portion of the week remotely will need to complete the agreement and submit to human resources,” Hill wrote.
Currently, most of ABC’s roughly 500 administrative staff members are working two days a week in the office and three days remotely. The authority employs about 5,000 part-time and full-time employees, some of whom can’t telework due to the nature of their jobs, such as staffing retail ABC stores. In January, the authority changed its daily opening hours to noon in part due to retail workers being affected by COVID-19, which created a staffing shortage. In fiscal year 2021, Virginia ABC brought in a record $1.4 billion in gross revenue, including $237.3 million in profits from retail sales.
Youngkin’s mandate requires state workers who have been working from home since March 2020 to return to the office in person starting July 5, and it renders all prior telework agreements null and void, even for employees who live outside the immediate region of their workplaces and were hired with the understanding that they could work remotely. Agency heads can approve one telework day a week, while a cabinet secretary must approve two days a week. Anything above that will require the approval of Youngkin’s chief of staff, Jeff Goettman.
In a memo released May 5, during Virginia’s Public Service Week, Goettman announced the order and said that the governor’s office’s goal is “completion of all telework agreements by June 3.”
Some state employees and Democratic legislators have denounced Youngkin’s telework policy, saying that it will cause some workers to leave their jobs for more flexible opportunities in the private sector, and that the new policy is more restrictive than pre-pandemic standards.
Some state employees — including those who are among faculty and professional staff at state universities — are not subject to the policy, and it doesn’t apply to legislative or judicial agencies.
Source: Roger Morris, Global Drinks Intel
CEO Travis Hill tells Roger Morris of Global Drinks Intel magazine how a 2018 switch to a for-profit business structure allowed Virginia’s state-run liquor retailer to improve services and increase sales.
As with many business leaders, Travis Hill experienced lots of organisational headaches during the mandatory lockdowns and other restrictive measures enacted to limit the spread of Covid-19 during 2020 and 2021. At the same time, Hill discovered these hurdles also opened the opportunity to accelerate some important organisational programmes already on the drawing board. Even more surprising, as the pandemic stretched on, Hill found his business’s ability to exercise flexibility added greatly to the bottom line.
Hill is CEO of the Virginia Alcoholic Beverage Control Authority (ABC), the solitary retailer of distilled spirits in Virginia as well as the government unit responsible for collecting taxes on retail sales of beer and wine in the large mid-Atlantic American state. The ABC currently has 4,700 employees, operates 395 liquor stores, has a burgeoning online business and, in fiscal 2021, hit gross revenues of $1.4bn, a 13.5% increase over a very productive 2020.
Hill credits a 2018 structural change — turning what had been a state agency into a state authority set up to run like a for-profit business — with providing the flexibility needed during a very difficult time. “Being an authority allowed us to be more nimble with purchasing and personnel, to permit us to be rightsized,” he tells Intel. “It also allowed us to fast-track a much-needed distribution facility, but the most important thing was that it gave our people a new mindset, permitting them to think differently, to be good at working with change. This has been critically important during the pandemic.”
Virginia is one of 17 states of the 50 in the US charged with some or all retail sales of alcoholic beverages rather than having that function handled by private enterprise. Their setups vary considerably. Unlike many other control states, Virginia does not sell wine in its liquor stores except that which has been made in Virginia, a service that gives broader distribution to local producers. Restaurants, which can sell spirits by the glass, are licensed and regulated by the ABC.
Online expansion and collaboration with licensees
The pandemic experience, Hill notes, allowed the agency to expand its own online sales as well as work closer with the state restaurants — called licensees by the authority — in allowing premixed cocktails to be sold for takeaway consumption outside the restaurant. Those sales proved a big boon for struggling eating establishments. As with some other states and cities which enacted similar permissions, Virginia has extended the alcohol-to-go rule for the foreseeable future.
An examination of the authority’s $1.4bn gross revenue during 2021 shows a net profit of $616.4m, with $237.3m coming from ABC sales, $305.2m from taxes on spirits, wine and beer along with an additional $73.9m in general sales taxes. Gross alcohol sales of $1.3bn in 2021 represented the third straight year the billion-dollar mark had been achieved, following gross sales of $1.2bn in 2020 and $1.1bn in 2019.
Growth was seen in several areas. Store sales volumes measured in nine-litre cases increased by 8.2%, while revenues jumped by 13.4%, showing the trend toward premiumisation that took place during the pandemic when customers continued to trade up.
Tequila was the big volume gainer in 2021, moving past rum into third place behind combined whisky and vodka sales by categories and scoring a 33% gain with 615,000 nine-litre cases sold. Whisky (about 1.9m aggregate cases) showed modest gains, as did vodka (1.7m cases). Within whisky, a new category of flavoured whisky logged in at 336,550 cases. Rounding out the top five, rum sold almost half a million cases, and gin registered 250,000 cases sold.
Other major increases were experienced by Cognac/Armagnac (+24%), cocktails (+25%) and straight rye whiskey (+25%). Among brands, tequila products with large increases were Patrón Silver, 1800 Silver, Jose Cuervo Especial Silver, Don Julio Blanco and Casamigos Blanco, while other big spirits gainers were Tito’s, Hennessy VS and D’usse VSOP.
“One of our biggest opportunities came in building out our e-commerce business,” Hill says. “We had planned in 2019 to expand that segment, and Covid-19 accelerated that. We’ve continued to invest in our curbside business as well.” Overall digital and web sales grew from $3.1m in 2019 to $8.7m in 2020 to $14.8m in 2022. The popularity of curbside pickup and home delivery led to a 60.2% increase in e-commerce revenue from fiscal year 2020 to fiscal year 2021, and is up over 700% from 2019.
Hill says the ABC has worked diligently to help restaurants and other licensees — about 19,000 of them altogether — to maintain optimal revenues and better serve customers during the pandemic, and that some of those programmes will continue. “We didn’t want to do any planning without having their input,” he says, “so we set up conference calls at the beginning and asked, ‘What do you need?’”
The authority has seen impressive results with its in-store marketing programmes. Spirited Thursday promotions, which provide discounts of premium brands in a single category on each Thursday during the month, have performed well during the pandemic. March 2020’s Irish whiskey event brought in-store sales of 3,338 bottles, a 102% category increase in revenue. July 2020’s event featured gin and brought sales of 2,959 bottles, a 478.8% increase in revenue over the previous year. The June 2021 Scotch whisky event resulted in store sales of 3,575 bottles for a 1,145% increase in dollars. September 2021’s Bourbon Spirited Thursday saw a total of 16,250 bottles for a 2,180% jump in sales. Online sales for each event saw similar incremental increases.
The ABC’s popular lottery offerings were put on hold during 2020 but were re-instituted in 2021. In March and April 2021, 2,200 bottles of various Bourbon products were offered, with three of the rarest bottles of Pappy Van Winkle Family Reserve 23yo selling for $299.99 each and more than 450 bottles of Old Rip Van Winkle 10yo selling for $69.99 each.
Flexibility and in-store marketing programmes One of the most popular and successful measures was the cocktails-to-go programme, “a totally foreign concept before the pandemic”, Hill says. “I think that the programme will be authorised [by the state’s General Assembly] for the next three years.” Flexibility was also needed, Hill says, in dealing with shipping delays and product unavailability due to glitches in the supply chain, “which was especially frustrating to our licensees”. He says supply issues have also led to adjustment in offerings during brand promotional programmes. Price inflation has not yet been a problem, Hill says, but he expects it to be a factor “during the back half of the year”.
Hill says that being able to operate like a for-profit business rather than a governmental unit was especially helpful in opening ahead of time a new 315,000sqft distribution centre and 95,000sqft headquarters near Richmond. The centre has advanced automated, web-based systems, with one employee being able to operate a dispenser that ships the ABC’s top 50 items. In addition, the facility can accommodate increasing e-commerce opportunities with additional space for expansion up to 399,000sqft.
“Business has increased to the point that we’re now shipping case volumes out of the new centre that we had previously only seen during the holidays,” Hill says. Additionally, in mid-2020, the ABC introduced a new point-of-sale (POS) system in its fleet of stores that streamlined many day-to-day store operations, including transactions, inventory management and licensee order fulfilment.
However, unlike a for-profit business, once the ABC’s business costs and reinvestment spending have been covered, net profits are returned to the state for education, health, human resources and public safety programmes.
The 2021 profits of $616.4m was an increase of $71.1m over the previous year, bringing the ABC’s total contributions to Virginia’s general fund to more than $2.6bn in the last five years. Looking to the future, Hill says, “Our main focuses are maintaining a stable workforce, being prepared for whatever surprises that will be coming after the pandemic and being able to accommodate growth during whatever Virginia ABC’s new distribution centre near Richmond in Hanover County stretches over 315,000 sqft is the new normal.”
The Daily Press - Jessica Nolte
Virginia’s Alcoholic Beverage Control Authority announced Sunday morning that it was removing seven Russian-sourced vodka brands from its shelves.
The state-run liquor store system attributed the decision to Gov. Glenn Youngkin’s call on Saturday for the state to take “decisive action” in support of Ukraine.
Sen. Louise Lucas also tweeted Saturday morning, calling on Youngkin to order the removal of all Russian products from the ABC stores.
The vodka brands to be removed include Beluga, Hammer & Sickle, Imperia, Mamont, Organika, Russian Standard and ZYR.
The stores will not be removing products such as Stolichnaya and Smirnoff, which are Russian-themed but not produced in Russia. Smirnoff is owned by Diageo, which is based in London, and is manufactured in Illinois.
Virginia ABC said in a Facebook post it would be reviewing its other products to determine whether they have origins in Russia.
Leaders in Ohio, Utah and New Hampshire have made similar calls for liquor stores to remove the products, according to a report from CNN.
The report said the move is largely symbolic since less than 1% of vodka consumed in the United States is produced in Russia.
Youngkin has also ordered the state’s Department of General Services to review state procurement of goods and services involving Russian companies.
The governor also called for Norfolk and Roanoke to end their sister city partnerships with Russian cities.
Jessica Nolte, 757-912-1675, email@example.com