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Virginia ABC tops $1 billion in revenues

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Virginia Secretary of Public Safety and Homeland Security Brian Moran

The Virginia Alcoholic Beverage Control Authority (ABC) broke its gross revenue record in fiscal year 2019, surpassing $1 billion for the first time ever, CEO Travis Hill announced Tuesday. The state agency’s profits of $499.5 million, an increase of $34.8 million over last year, will go to the state’s General Fund.

The ABC’s profits reflect $223 million in retail taxes, $196.7 million in sales and $79.8 million collected from wine and beer taxes. Retail sales in its 380 stores grew by 7.1% and sales of licenses to restaurants went up 6.3% during fiscal year 2019, which ended July 31. The ABC added seven new stores in the last year, generating nearly $8 million in additional sales.

“We are celebrating today, but we are doing so responsibly,” joked Hill at the morning press conference held at the authority’s Hermitage Road headquarters in Richmond. He attributed the rise in revenue — up $71.8 million from fiscal year 2018 — to changes in adults’ drinking habits and a shift in the ABC’s marketing mindset.

Retail hours on Sundays and increases in online sales, plus basing inventory stocking decisions on regional preferences have helped sales, he said. Also, nationwide and in the commonwealth, drinkers are consuming distilled spirits in greater numbers than in previous years, Hill added, as well as buying higher premium products with larger price tags.

The liquors showing the most growth in Virginia are Irish whiskey, tequila and straight bourbon, he said. Tito’s Handmade Vodka remains the No. 1 brand, sold with a leap from $33.5 million to $42.1 million in statewide sales this year, a 26% increase.

ABC is expected to open eight new stores in the next six months — two in Norfolk, two in Fairfax County and one each in Alexandria and Henrico, Prince William and Rockingham counties.

Virginia Secretary of Public Safety and Homeland Security Brian Moran, who oversees the ABC, congratulated the authority’s nearly 4,000 employees, who work in sales, distribution, licensing and enforcement.

“This is substantial revenue to the commonwealth’s General Fund,” he said. The state legislature allocates 40.2% of the General Fund to education, 31.6% to health and human resources, 13.7% to general government, 9.5% to public safety and 5.1% to other expenses.

In coming months, the agency plans to open eight new stores, introduce new licensing and point-of-sales systems as well as preparing for the 2021 relocation of its headquarters to eastern Hanover County.

The agency closed this summer on a $8 million, 40-acre plot in Mechanicsville, where a new ABC headquarters and warehouse are expected to be completed in the first half of 2021.

Plans for expansion started in earnest five years ago, Hill said, because the ABC’s aging headquarters and warehouse near Richmond’s Diamond baseball stadium were close to capacity for staff and inventory. Today, “we are bursting at the seams,” he said, prompting the agency to lease additional nearby warehouse space.

As for the ABC’s Hermitage Road property, which could figure into a replacement baseball stadium for the Richmond Flying Squirrels and an athletic village for Virginia Commonwealth University, VCU has “first call” on purchasing the land, Hill said.

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