Author: Matt Pusatory (WUSA9) Published: 2:20 PM EDT August 16, 2023
Updated: 2:20 PM EDT August 16, 2023 Here are some of the biggest changes to the lottery system.
RICHMOND, Va. — If you're a connoisseur of fine liquors and spirits in the Commonwealth, chances are you have heard of the Virginia Alcoholic Beverage Control Authority's online lotteries. Throughout the year, Virginia ABC offers special releases of products, including highly sought bourbons, whiskeys and other small-batch spirits offerings, for purchase by lottery. Some big changes are coming to the lottery process.
To enter a lottery, an entry form is available online for a period of at least three days. Odds depend on the number of entries received and the number of bottles available. At the close of the lottery period, Virginia ABC uses a random drawing process to select the winning entries for each product code offered in the lottery. The next lottery is being held Aug. 21-25. Here are the changes taking effect:
The next lottery is for 72 bottles of Reservoir Hazmat Rye Whiskey. Winners and non-winners will be notified on Sept. 1. The Tidewater News - August 14, 2023
Up to about 1891, Franklin was a typical “wet” town. Going back in time to the mid 1830s, when Franklin was first established as a village, liquor manufacture, distribution and consumption was not controlled. However, starting in the latter part of the 1800s, it was controlled to some extent through Southampton County licensing of establishments. In 1891, though, the citizens of Franklin, led by the Women’s Christian Temperance Union (WCTU) and the churches, petitioned Judge Barrett of the Southampton County Court to refuse liquor licenses for Franklin, which petition was granted. As a “no-liquor” town, Franklin was a failure and it returned to its previous ways — blatant production, distribution, and consumption. Liquor was being brought in weekly by the buckboard-load and every known “wet person” knew where in town he could get all the liquor he wanted. In 1892, after the no-license system had been in effect for a year, a local option election was held — whether to re-establish licensing of alcohol. The “wets” won by one vote. A prominent worker for the “dry” cause was Rev. C. C. Werenbaker, pastor of the Methodist Church; but he, having failed to register, could not vote. Had he been in a position to vote, there would have been a tie; and it was generally thought that Judge Barrett would have decided in favor of the “dry” element. Illogically, though, had the “drys” won, alcohol production and use, would have still existed – but illegally! So, local licensing of establishments to legally dispense alcohol was reinstituted and this system was in place right up to the early 1900s. Around about that time, the Commonwealth of Virginia, following the lead of other states, especially South Carolina, decided to consider STATE-controlled liquor STORES. So, for the first time the Commonwealth of Virginia got involved with the liquor business. And, for whatever reason, Franklin was chosen as the first Virginia location, in 1902, of what was called a dispensary. It was located in a building on First Avenue, right next to the alley that ran behind the stores that faced Main Street. Later, the dispensary building was used for other purposes – including William Branch’s first shoe repair store. The Franklin Dispensary was managed by three commissioners, some of Franklin’s most prominent and best citizens: Cecil C. Vaughan Sr., R. S. Fagan, and John C. Parker Sr. Mr. Fagan was designated as the purchasing agent for the dispensary. The profits from liquor sales were divided as follows: three-eighths to the Town of Franklin, three-eighths to the District, and two-eighths to the State. From the profits received by the town were built concrete sidewalks on Main, High and Clay streets and First, Second and Fourth avenues. Some of the residents were at first loath to use the sidewalks, claiming they had been built with “blood money”. And, the fine and grand Franklin Elementary School, built in 1905 and located at 516 West Second Avenue, was made possible through funds derived from the dispensary. Many people were especially upset by the fact that the education of the town’s children was being accomplished through the sale of evil spirits. All along, the Southampton County WCTU was vehemently opposed to and disdained alcohol in general; and, in particular, the presence of the liquor dispensary in the community. The public outcry against any official town connection with alcohol became so great that, in 1907, the Franklin Dispensary authorization was abolished. Franklin was the first town in the state to have a state-controlled liquor store and was the first town to abolish it. After the abolishment, there was very little control of alcohol, at any level, for many years. All the foregoing, of course, was much before the national institution of prohibition. The 18th Amendment of the United States Constitution (to establish prohibition), as of Jan. 16, 1919, was ratified by two-thirds of the states and was effective Jan. 17, 1920. However, actual enforcement of the legislation was slow in coming about. In some cases, for an extended period of time, enforcement was non-existent in some areas of the country. Although prohibition was established and was supported by many people, in actuality, millions of Americans were STILL drinking alcoholic beverages. Because the law did not specifically outlaw consumption, many people stockpiled alcohol and figured out ways to obtain it. This gave rise to bootlegging (illegal production, sale, and distribution) and “speakeasies” (illegal and secret drinking establishments) which were capitalized upon by organized crime. Gangsterism and turf battles between criminal gangs were prevalent. In the long run, it became obvious that prohibition had caused far more problems than it had solved. Of much concern, was the increase in criminal activity, public corruption, and, in general, a prevalent casual disregard of law. An organization called “Women’s Organization for National Prohibition Reform” was at the forefront of the movement to REPEAL the prohibition law. As of Dec. 5, 1933, the 21st amendment (to repeal prohibition) of the United States Constitution was ratified by two-thirds of the states — which automatically and officially repealed the 18th amendment of the United States Constitution (the establishment of prohibition). Virginia Governor John Pollard called the General Assembly into special session — to legalize 3.2 % alcoholic beverages. On March 22, 1934, the Virginia General Assembly voted to adopt a liquor control plan – and created the Virginia Department of Alcoholic Beverage Control. And, even though the Virginia ABC system was establishing stores in communities across the state, Franklin did not have an ABC store until 1950; before that, people from this area had to go to Suffolk to purchase legal liquor. CLYDE PARKER is a retired human resources manager for the former Franklin Equipment Co. and a member of the Southampton County Historical Society. His email address is magnolia101@charter.net. ‘I haven’t heard anybody in the state say what we need to do is put more money into the alcoholic beverage commission’
BY: MEGHAN MCINTYRE - JULY 27, 2023 12:04 AM Four years after Virginia transitioned its Department of Alcoholic Beverage Control into an authority in an effort to make the state agency run more like a business, Gov. Glenn Youngkin’s administration says ABC isn’t generating the additional funding for Virginia as originally intended. Administration officials told ABC’s Board of Directors last week the authority’s profits and contributions to state coffers have declined in recent years while operating costs have increased $135 million since 2017. | Virginia Chief Transformation Officer Eric Moeller said ABC’s contributions have declined from a peak of $229 million in 2021 to $227 million in 2022 and $221 million in 2023 even as revenue generated by the authority increased by nearly $100 million over the same time period. “All that growth has not resulted in bottom-line cash to the economy,” said Moeller at the July 20 Board of Directors meeting. While ABC officials say they don’t dispute the administration’s findings, they argue the authority’s financial transfers to Virginia’s general and other funds continue to “exceed the expectations” of General Assembly budget projections. Additionally, they say the rising costs can be attributed to investments in authority operations and employees that are intended to yield long-term benefits. “We understood that doing these investments would come at a cost for reduced profit growth,” said ABC CEO Travis Hill during the meeting. “It was certainly understood that it was going to help us in the long term.” ‘Investments should have a return’ Key to the administration’s criticism of ABC last week was what it described as several years of declining profitability and rising costs to the commonwealth. According to the administration, ABC’s annual profitability has been steadily declining ever since peaking in 2019. At the same time, annual operating costs increased by $123 million and revenues grew from $903 million to over $1.2 billion. Virginia Deputy Chief Transformation Officer Tony Lee told the Board of Directors ABC should be able to currently achieve greater profitability because “the company has grown, stores have grown and the inflation on alcohol prices has exceeded the inflation at the operating cost level.” While Moeller acknowledged that ABC has undergone significant change in recent years, he said the authority needs to justify how money is being spent. “Investments should have a return,” he said, adding, “I don’t know that we’ve always had a rigorous process for ensuring they’ve been evaluating the priority before, during and after the investments that we really got a return on all the things that we’ve done.” “Whatever we’ve done – whether they were right or wrong – it’s water under the bridge and the money’s been spent,” he continued. While ABC had previously proposed a budget of nearly $340 million for the next fiscal year, the Youngkin administration put forward a proposal for $21 million less, a suggestion that received particular pushback from Board of Directors member Mark Rubin and was ultimately rejected by the board on a 3-2 vote. “I saw today there’s $5.2 billion of additional money in Virginia,” Rubin said to Moeller at the July 20 meeting. Losing $21 million in the authority’s budget “may make us less productive and take us off of the path we’re on in terms of the future,” he continued. Moeller replied, “With all due respect, it’s not your money. It belongs to the people of Virginia, and there are a lot of things to do with it at this time.” “I haven’t heard anybody in the state say what we need to do is put more money into the alcoholic beverage commission,” he added. Striking a balance ABC officials agreed with the administration that the authority’s goal is to generate increased amounts of profit for Virginia but emphasized investments were and are still needed for long-term success. Hill told the Board of Directors that ABC required major investments after transitioning to an authority to address issues like technical debt, outdated information technology systems and an inefficient distribution center. The CEO said the authority’s investment “has succeeded” in terms of decreasing employee turnover, increasing transfers to the commonwealth and ensuring ABC remains a competitive employer. ABC Chief Administrative Officer David Alfano told the Mercury employee salaries and benefits are one of the biggest contributors to ABC’s expenses and increase every year. Despite these rising costs, Alfano said ABC has transferred $40 million more to Virginia than General Assembly projections called for since 2021 – contrary to data presented by Moeller during the board meeting showing a decline in transfers. Administration officials told the Mercury their figures appear smaller than what’s listed on ABC’s annual reports because they didn’t take into account the “noise” of non-operating activity – like the sale of the authority’s old Hermitage Road warehouse in Richmond – in order to provide a more accurate picture of operating profitability. Hill told the Board of Directors ABC needs to “strike a balance between achieving even greater profitability” while “making sure we keep pace with business investments” so that the authority doesn’t find itself in a similar situation with the administration next year. Board Chair Tim Hugo said concerns will continue to be raised about ABC if its profitability does not stop declining. “If you explode your costs and explode your cost structure and your profitability goes down, people are going to ask the question why,’” Hugo said. “And they’re not going to stop and they’re going to start looking under every rock you’ve got.” News Release Contact:Virginia ABC Communications - (804) 213-4413
Email: pubrel@VirginiaABC.com Beginning Saturday, July 1, laws impacting the operation of 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 legislation during the 2023 session, and Gov. Glenn Youngkin has since signed them into law. Crossover Product Rules (HB 1979 and SB 809) – Both bills established guidelines for licensees regarding the display of alcoholic beverages near non-alcoholic beverages of the same or similar branding, logo or packaging. The new law was created to address innovative “crossover products” that contain alcohol and may cause consumer confusion or appeal to an underage audience. Virginia ABC developed resources addressing crossover products for licensees, including stickers and a product guide. In July, ABC’s Bureau of Law Enforcement agents will distribute these resources, which will also be available online. Employment Restrictions Relaxed (HB 1730) – This law streamlines the process for licensees to hire individuals with a felony conviction. Prospective employees must be two years past their conviction, with all terms of probation or parole completed (or have written permission from Virginia ABC and consultation with the probation and parole officer). Seasonal Marketplace License Fee (HB 2336) – This law lowers the annual state license fee from $1,000 to $500 and the annual local license tax from $200 to $100 for marketplace licenses, when licensing privileges are exercised for six or less consecutive months, if such a period is specified prior to the beginning of the license year. Local Alcohol Safety Action Boards (HB 2370 and SB 841) – Both bills modified the jurisdiction and composition of local alcohol safety action boards. Per the Code of Virginia, ABC’s profits from in-store and online retail sales provide funding for designated state programs and services. For fiscal year 2022, ABC contributed a total of $622.8 million ($243.6 million from retail sales) to the commonwealth. The Virginia Mercury - BY: MEGHAN MCINTYRE - JUNE 27, 2023 12:04 AM
After discovering at least seven cases of embezzlement at stores around Virginia, the Virginia Alcoholic Beverage Control Authority issued a press release early this month stating inventory losses incurred by the authority “compare favorably to the overall retail market.” However, the authority’s numbers and explanations for its losses have fluctuated dramatically, causing some ABC insiders to wonder whether the authority is accurately reporting how much liquor is going missing from its books. In response to questions from the Virginia Mercury, ABC officials claimed they cannot provide a detailed breakdown separating inventory losses at ABC retail stores from inventory losses at the authority’s distribution centers – despite a presentation recently given to ABC’s Board of Directors and authority documents that indicate the authority tracks that data. That distinction is important, according to business experts, because addressing inventory problems can be difficult if the source of those problems is unknown. Despite ABC’s claims, authority emails obtained by the Mercury through a Freedom of Information Act request indicate the distribution centers may have been the primary source of inventory losses, and warehouse losses in fiscal year 2022 may have been greater than the authority recently reported. A shrink in distribution center inventory Jim Bradley, a professor of operations management and information technology at William & Mary, said all businesses experience losses due to “shrink,” an industry term used to describe when a company has less inventory — or liquor, in ABC’s case — than previously recorded. Shrink results in a loss of profits because missing products cannot be sold. In its June 6 press release, Virginia ABC said it had conducted inventories of its distribution center and 394 stores this March and found approximately $1.5 million worth of shrink from the two combined in fiscal year 2022. A June 6 press release from Virginia ABC describing shrink over the past few years. This was the same number authority officials presented to the Board of Directors June 8 while detailing the transfer of inventory from the authority’s old Richmond distribution center – the warehouse where the majority of inventory was kept before being shipped to stores – to its new distribution center in Mechanicsville throughout 2021 and 2022. But an internal ABC report dated June 29, 2022, which was obtained by the Mercury through a FOIA request, pinpointed over $2.7 million in shrink for the same year tied to the authority’s distribution centers alone. The same report also identified $540,000 worth of “swell” — the opposite of shrink, describing a situation in which products previously recorded as missing are found — occurred in stores that year. An internal ABC report dated June 29, 2022, which was obtained by the Mercury through a Freedom of Information Act request. Taken together, the figures put ABC’s overall shrink for 2022 at over $2.2 million, all of which stemmed from its distribution centers. Even with this higher number, Virginia ABC still falls well below the 2021 national average of shrink as a percentage of gross sales, according to data collected in a 2022 National Retail Federation survey. Asked about the discrepancy between the $2.7 million and $2.2 million drawn from the internal emails and the $1.5 million noted in the press release, ABC spokesman Pat Kane said the larger figures obtained through the FOIA request “are working documents, and do not reflect the final numbers.” Where losses come from Pinpointing the source of the authority’s losses is complicated because ABC has not provided a breakdown of its $1.5 million figure into shrink from stores and shrink from the distribution centers. Megan Hess, associate professor of accounting at Washington and Lee University, said from a managerial perspective, knowing where shrink is coming from is important for figuring out what controls need to be in place to mitigate losses. “If you’re trying to solve that problem, you need to know why it is happening. Where is it happening? How much is it happening?” Hess said. Kane told the Mercury the authority is “not able to provide separated numbers.” ABC Director of Communications Nick Schimick also told the Mercury that “historically separate adjustment categories have not been broken out between the stores and distribution center.” However, comments at a Board of Directors meeting and internal ABC documents obtained by the Mercury indicate the authority has at different times tracked how much shrink is occurring in stores and distribution centers individually. At the June 8 meeting, ABC Automation Control and Inventory Supervisor Kate Sheehan told the board the distribution centers’ 2023 “year-to-date shrink is $340,000.” Schimick said that figure “was and is an internal working number, and as our systems stand today, it is not integrated into our financial systems and not reported out as its own bucket.” Additionally, a March 30 screenshot of the authority’s new centralized dashboard, which the June press release noted will be used to track shrink, shows annual shrink and sales numbers for stores dating back to 2020. A March 30, 2023 screenshot of ABC’s new centralized dashboard. The screenshot was shared with the Mercury by sources with knowledge of the authority who requested anonymity due to concerns over retaliation. When the Mercury asked why ABC couldn’t provide separate shrink numbers when the dashboard indicates otherwise, Schimick told the Mercury that “the data referenced in the dashboard does not reflect final adjustments.” The March dashboard screenshot records the total shrink in 2023 for stores only as $1,127,449 – the same number ABC presented in its press release as the total shrink that year for the authority’s stores and distribution centers combined. In response to questions about the inclusion of distribution center shrink in ABC shrink data, Schimick told the Mercury in an email, “store shrink is what we reported $1,127,449. The numbers reported for the distribution center represents the net adjustment from the full physical count in March 2023.” Knowing only total shrink “doesn’t permit a company to manage it,” said Bradley, the William & Mary operations management and information technology professor. “You need to know which items are being lost, where in the supply chain you’re losing it and why you’re losing it and then come up with a strategy to fix it.” |
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