Distillers sour about planned spike in liquor prices

WASHINGTON — More than a dozen distillers in Virginia have sent a joint letter to Gov. Terry McAullife, asking him to reconsider marking up liquor costs to help fill a budget hole.

Recently, the governor announced the spike in spirit costs will come to the aide of a $2.4 million budget shortfall.

“We don’t want to be the easy go-to person every time there is a new budget crisis,” says Scott Harris of Catoctin Creek in Purcellville.

He says the letter comes after the Department of Alcoholic Beverage Control asked distillers for input.

According to the ABC, the last markup increase on distilled spirits occurred February 2008, and was 4 percent. Harris says distillers have endured ten markups since 1980, and right now 55 percent of the money made on every bottle goes to the Commonwealth. Liquor sales have meant big dollars for the state, which saw $801 million in sales in fiscal year 2013.

An expensive spirits market has made it hard for smaller distilleries. “We don’t see our products growing as fast in Virginia as they are for instance in DC or Maryland,” he says.

In Virginia, liquor can only be purchased at state-run ABC stores, which means hotels, restaurants and bars can’t take advantage of wholesale pricing –which is available to those businesses in other states.

Harris says increasing the number of retailers allowed to sell alcohol in the state “would probably fix this problem ten fold.”

The ABC hasn’t decided when and by how much prices will go up but in the letter the distillers say when it happens, it will deal a blow to the state’s growing distilling industry.

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