Virginia alcohol price hikes may generate $9.5m

Alcohol price increases in Virginia that came into effect on 1 January could bring in an extra US$9.5 million by 2016, according to the Alcoholic Beverage Control (ABC).

Alcohol price hikes in Virginia are expected to generate around US$9.5 million by 2016

On 16 December 2014, taxes on miniature bottles of spirits increased from 49% to 69% and the cost of case handling – encompassing the distribution from the supplier to the consumer – doubled from US$1 to US$2.

In addition, on 1 January the ABC also implemented an initiative titled “rounding to the dime”, in which a bottle of alcohol is rounded up to the nearest zero.

The Virginia department of the ABC said the hikes were necessary to ensure the department could continue to operate smoothly.

“Back in October, [governor McAuliffe] announced a mark-up on distilled spirits as part of his plan to balance the current financial budget,” Kathleen Shaw, a representative for the department, told news site You4State. “So the initiatives went to help cover some of the budget deficit here in Virginia, and we also hope to be able to modernise ABC’s aging infrastructure.”

With the new regulations, consumers are expected to pay approximately 23-30 cents more for an “average-priced” bottle of around US$15.

This is predicted to generate US$9.5m for the state in the 2016 fiscal year, which currently has a budget deficit of US$882 billion.

“This money goes to support state services,” said Shaw. “Everything from building roads, to enhancing education to funding substance abuse prevention and treatment.”