An effort to privatize the retail liquor business in Alabama deserves close scrutiny in the state Legislature.
Sen. Arthur Orr, chairman of the Senate’s General Fund Budget Committee, says the state could save $46 million by eliminating its 169 retail stores and their 600 employees.
The Decatur Republican said state liquor stores are part of an antiquated system left over from the end of Prohibition.
Under his plan, the Alabama Alcoholic Beverage Control Board would continue its wholesale operation, but would distribute liquor only to private retail stores. It would continue enforcing liquor laws, determine how many retail stores are in each town and award contracts through a competitive bid process. The state would continue collecting taxes on alcohol, and let the law of supply and demand determine retail prices.
Drawbacks include the fact that 600 people could be added to the state unemployment rolls. Although new private retailers would provide employment, those jobs would likely be at lower wages and with no benefits. Another issue could be higher prices for consumers. A similar move in the state of Washington in 2012 resulted in prices jumping by more than $3 per liter. Another consideration is whether crime would increase with private stores operating longer hours than state outlets.
Lawmakers need to carefully weigh the pros of privatizing the liquor business against the cons. As they search every corner for budget cuts and new revenue, they may discover enough savings to justify a change.