RD578 - 2016 Annual Report of the Virginia Department of Alcoholic Beverage Control (ABC)

Executive Summary:
Fiscal year 2016 was a very good year for Virginia ABC. We continued to provide excellent service to our retail and restaurant customers, expand our partnerships with vendors and brokers and open new and innovative stores. I credit the agency’s dedicated and resourceful employees with generating nearly $900 million in sales, making the year our 18th consecutive record-setting year.

Virginia ABC’s gross sales increased to $897.8 million, up $49.7 million over the previous year, while profits rose to $165 million, an increase of $13 million. Retail sales grew 5.4 percent and sales to restaurants climbed 7.4 percent during the same timeframe.

ABC profits combined with state and general sales taxes as well as wine and beer taxes resulted in an all-time high of $433 million transferred to Virginia’s general fund—$24 million above last year’s contribution. A major source of revenue for the Commonwealth, Virginia ABC has contributed more than $9.5 billion to the general fund since 1934 to support state services, including substance abuse prevention and treatment.

The agency’s strong financial performance during the fiscal year is in part due to the opening of eight new stores across the state, generating $4.3 million in sales. ABC’s strategy to continue to grow its store portfolio is a major component of its consistent revenue growth. ABC also oversaw eight store remodels and ten store relocations to improved market areas, enhancing customer service and accessibility. Sunday sales continued to play a role in the rising revenue, increasing by $3.2 million or 6.5 percent to $53 million.

Among our notable achievements for the year was the launch of the agency’s Spirited Virginia brand which encompasses a 68-page color quarterly magazine, a monthly e-newsletter and a product-oriented Facebook page. At fiscal year-end, magazine circulation had tripled to 42,000 copies and e-newsletter subscribers had nearly doubled to 11,615 readers. The Spirited Virginia Facebook page had more than 1,400 likes.

Our agency’s other social media accounts continued to grow in popularity as well with more than 7,800 Twitter followers and nearly 4,200 likes on Facebook.

Other noteworthy milestones included the opening of our fourth premier store. Located in Richmond’s Short Pump area, this 6,000 square foot store is one of the agency’s largest. The store décor reflects Richmond’s rich history with dramatic white, Ionic columns evocative of the Virginia State Capitol colonnade, exposed brick and vintage sepia photographs of Richmond’s cityscape. Displays of antique jugs and whimsical black and white photographs of tipplers from a bygone era provide a decorative nod to the Commonwealth’s history of alcoholic beverages.

Our Bureau of Law Enforcement earned its initial accreditation from the Virginia Law Enforcement Professional Standards Commission (VLEPSC) and became one of less than 100 accredited law enforcement agencies in the state. This accreditation supports an ongoing culture of professionalism and accountability among our special agents.

Building on a very new partnership with the Virginia Tourism Corporation, we were pleased to see the passage of House Bill 323, which permits ABC to sell “Virginia Is For Lovers” trademarked merchandise in our stores. Other legislation, HB 322, was also passed which permits summary suspensions and enables the agency to take swift action against a licensee for specific public safety issues at licensed establishments.

Lastly, we began a very important transition process that will transform Virginia ABC from an agency to an Authority effective July 2018.

Virginia ABC remains committed to providing a consistent source of income for the Commonwealth and focusing on the public safety concerns of its citizens.

Jeffrey L. Painter
ABC Board Chairman