Virginia ABC Overview of Operations and Proposed Budget Items - Travis G. Hill, CEO Virginia ABC
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Virginia ABC
Overview of Operations and Proposed Budget Items
Senate Finance and Appropriations – Public Safety Subcommittee
January 22, 2020
Travis G. Hill, CEO Virginia ABC
Virginia Alcoholic Beverage Control Act
Virginia Code Title 4.1 - Creates the Alcoholic Beverage Control Authority
• During 2018 Virginia ABC transitioned from a Department to an Authority
• ABC Authority
• 5 part-time members appointed by the Governor
• Chair and Vice Chair designated by the Governor
• Receive salaries set in Code – equivalent to that of a member of the House of Delegates (chair receives compensation of a Senator)
• CEO appointed by the Governor, responsible for operations of the Authority
• Exempt from Personnel and Procurement Acts
• May procure IT services outside of VITA
• Authority continues to function as retailer and regulator
• Operate a retail organization – sole distributor and retailer (subject to a few exceptions)
• Regulate the three tiers of the alcoholic beverage industry
• Manufacturers
• Wholesalers
• Retailers
2
Current State of the Control State
• Key Metrics
– 2019 Top 100 Retailer Award - Beverage Dynamics magazine
– FY 2019 Gross Sales of $1,054 million (up 7.2%)
– FY 2019 Profits of $198 million (up 9.2%)
– Retail Licenses: 19,870 (up 3.5%)
– Total Cases shipped to ABC stores: 5,316,778 (up 4.9%)
– ABC store underage sales compliance – 99%
– Licensee underage sales compliance – 87%
• Operating Expense
– FY 2019: $705.8 million (up 5.9%)
– FY 2019 Operating expenses include: alcohol – 71.4%, personnel – 16.5%,
retail occupancy - 4.9% and contractual (VITA, freight) - 5.8%
• Employee Numbers
– At end of FY 2019 ABC had 3,723 total employees
• 1,163 full-time employees
• 2,560 part-time employees
3
4
Historical Profit Growth
ABC Profits and Number of Stores FY 2008-FY 2019
Profits Profit No. Of Stores Number of ABC Stores
$225.0 400
$200.0 350
$175.0
300
$150.0
250
$125.0
200
$100.0
150
$75.0
100
$50.0
$25.0 50
$0.0 0
2010 2011 2012 2013 2014 2015
Fiscal Year 2016 2017 2018 2019
5
Contributions to Commonwealth Last 7
Years Total $3B
FY 2019 increased $33 million over FY 2018, $130 million over FY 2013
Dollars in Millions
FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Revenue Source
ABC profit transfers $134.6 $140.0 $152.0 $164.9 $171.2 $180.8 $196.7
State excise taxes $126.8 $132.0 $139.8 $147.8 $154.4 $161.5 $174.1
General sales tax $31.3 $36.9 $39.2 $41.3 $43.3 $45.4 $48.8
Wine liter tax $34.4 $34.6 $35.2 $36.2 $36.8 $38.2 $38.5
Malt beverage tax $42.8 $43.3 $42.9 $43.2 $42.8 $42.9 $41.4
Total $369.9 $386.9 $409.3 $433.4 $448.6 $467.2 $499.5
6
Retail Operations
Retail Operations
• Retail Stores and386 Stores
Field Managementand Growing
• 386 Stores
• 2903 Employees
• 2 Zone Managers
• 25 Regional Managers averaging 16 stores in their area of responsibility
• 374 Store Managers (leaving 12 stores without a store manager)
• 312 Assistant Store Managers (leaving 74 stores without an assistant manager)
• 100 Senior Sales Associates as part of the effort to retain top talent from wage to classified
• 12 used as only full time support in stores without an onsite manager and 74 used in place of Assistant
Managers
• 2090 Part-Time employees
• Over 3.2 Million Labor hours annually
• 4.5 out of 5 Customer Service Score 2019 Calendar Year
• Retail Operations Support - Central Office
• 7 Full Time including the Director Of Retail Operations and 2 Part Time employees
• Support and coordinate all activities in 386 stores as well as the growth and remodel of all new and
existing stores.
• Just over 17,000 labor hours annually
7
Licensing and Enforcement
• Bureau of Law Enforcement
• 110 employees
• 88 sworn agents in 9 field offices
• Field agents focus on retail and banquet license investigations
• Compliance agents handle wholesale and manufacturer licenses
• 22 civilian staff in Licensing and Records Management
• Almost 20,000 retail licensees
• 24,000 one-day banquet licenses
• Activities include site inspections, application investigations, covert observations,
planned operations and criminal investigations
• Tax Management responsible for $80M in excise tax collections
• Hearings Division
• Adjudicates almost 500 cases annually
• Most frequent cases involved underage sales and mixed beverage ratio (§4.1-114)
• Reforms made as part of Authority transition
• Decreased resolution time by one-third, down to 50 days from 75 days
• $610,250 in penalties collected since December 2018, up from $370,600 in prior year
8
Profit Forecast
9Financial Forecast – Revenue (Sales)
Sales Forecast – 4.6% increase in FY2020
• Industry growth rates projected at 4.0% for FY2018 – 2021
• The forecast includes adjustments for changes in the number of
Friday and Saturday sales vs. Sunday through Thursday sales
(calendar impacts)
• Timing of holidays – FY2019 longest possible holiday season;
FY2020 shortest possible
• New Store Growth
10FY2020 Gross Sales by Month
2020 2020 2020
Actual Budget Variance %
July $ 88.3 $ 88.2 0.1%
August $ 93.4 $ 91.3 2.2%
September $ 83.4 $ 85.4 -2.4%
October $ 91.6 $ 88.6 3.3%
November $ 106.0 $ 103.3 2.5%
December $ 127.8 $ 133.3 -4.3%
January
February
March
April
May
June
Total $590.5M $590.1M 0.1%
*Fiscal Year 2020 Gross Sales are favorable by 0.07% ($400K).
11Store Growth
Current Store Count - 386
Fiscal Year 20
• Ten Stores Opened (with nine more locations in process)
-Virginia Beach -Timberville
-Alexandria (two locations) -Springfield
-Winchester -Henrico
-Norfolk (two locations) -Fairfax
• Nine Stores Relocated (with thirteen more locations in process)
-Louisa, Mechanicsville, Herndon, Carrollton, Purcellville, Daleville, Stafford, Hampton (2)
• Two Stores Updated and Three Stores are Scheduled for Expansion
12Appropriation Act Profit Requirement
FY 2019 FY 2020 FY 2021 FY 2022
Profit Transfer Required by Code 115,600,000 121,600,000 121,800,000 125,200,000
Department of Behavioral Health &
Developmental Services 65,375,769 65,375,769 65,375,769 65,375,769
Auditor of Public Accounts 75,521 75,521 75,521 75,521
Department of Accounts 64,607 64,607 64,607 64,607
Department of the Treasury 47,628 47,628 47,628 47,628
Central Service Agency Support 169 169 - -
Operating Efficiencies 3,364,585 3,864,585 3,864,585 3,864,585
Deferred VRS 1,001,765 - - -
Profit Transfer 185,530,044 191,028,279 191,228,110 194,628,110
13Financial Forecast – P & L
GACRE FY 2019 – FY 2025
($ million)
FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025
Revenue Sources: Growth Rate 5.00% 4.50% 4.50% 4.50% 4.50% 4.50%
Alcoholic Beverages (Store Sales) 1,054.1 1,106.8 1,156.6 1,208.7 1,263.1 1,319.9 1,379.3
Less: State Taxes on Spirits & Wine 174.3 181.0 189.1 197.6 206.5 215.8 225.5
Net Store Sales 879.9 925.9 967.5 1,011.1 1,056.5 1,104.1 1,153.8
Other Revenue 23.3 22.6 22.8 23.0 25.7 26.0 26.3
Total ABC Revenue 903.2 948.4 990.3 1,034.1 1,082.3 1,130.1 1,180.0
Cost of Goods Sold: 504.5 531.3 555.1 580.1 606.2 636.1 664.7
Operating Costs: 201.1 224.2 232.7 246.2 255.5 268.1 278.1
Infrastructure Projects: - 2.0 9.1 12.0 17.4 14.9 14.9
GASB 87: Preliminary Estimate - - 2.1 1.2 0.6 - -
ABC Net Profit 197.5 191.0 191.2 194.7 202.6 211.1 222.4
14GASB – Standard No. 87
Governmental Accounting Standards Board
Effective for the Commonwealth and ABC on July 1,
2020 (Fiscal Year 2021)
Provides a single model for lease accounting across
all government entities
Assumes all leases are financing the right to use an
asset
Significantly changes the accounting methodology
for leases
15Financial Impact of GASB 87
Single Store Illustration
Gainesville, VA Total
P & L Impact
• Opened 3/1/2009 Current 3.5% S/L Expenses
After
• 5 year lease with 5 after
year option to Rent Interest Amortization GASB 87 GASB 87
renew FY 2017 $ 93,509
FY 2018 $ 95,379
• Assume renewal
FY 2019 $ 97,286
option will be
FY 2020 $ 99,232
exercised
FY 2021 $ 101,217 $ 11,386 $ 97,183 $ 108,569 $ 7,352
• Interest rate has
FY 2022 $ 103,241 $ 8,158 $ 97,183 $ 105,341 $ 2,100
significant P&L
FY 2023 $ 105,306 $ 4,743 $ 97,183 $ 101,926 $ (3,380)
impact
FY 2024 $ 80,157 $ 1,198 $ 72,887 $ 74,085 $ (6,072)
$ 775,327 $ 25,485 $ 364,436 $ 389,921 $ -
16GASB 87 Impact on ABC
• Financial Management Impact
• ABC has numerous capital leases, both retail
space and equipment
• ABC Profit will be negatively impacted during
first 2 to 3 years of implementation
• Lease Accountant Position created
• New Financial System
• GASB 87 Compliance was a key requirement for
the new system.
• Lease administration becomes an accounting
function
• Must have strong knowledge of Accounting to process the monthly rent
payments and other costs such as CAM charges (which are tracked by lease).
17FY21 – FY22 Operating Budget Items
18FY21-22 Operating Budget Items
• Cost of Goods Sold – increase appropriation for purchase of goods sold ($50.3M – FY21; $90.M – FY22)
• Line of Credit – Multiple large projects and need to maintain cash for operating expenses at start of FY
• New Stores and Store Growth – Operating costs for new stores (personnel, rent, etc); additional
staffing for store growth ($2.7M – FY21; $8.1M – FY22)
• Personnel Conversion – Moving wage to full-time, addressing staff turnover and continued impact of
29-hour rule (25 positions, $500K each year of biennium)
• Central Office/Warehouse Move – One-time costs for moving central office and warehouse, including
dual operations ($3.1M over biennium)
• License Reform – Change in fee structure to fund modernization of Enforcement operations and
enhanced licensee service ($2.5M in FY22 supporting 26 positions funded by SB389)
• Store Updates – Updating stores to include new lighting, shelving and technology for store employees
($1M in FY22)
• Contractor Conversion – Converting 15 IT contractor positions to full-time; decreases reliance on
contract labor and enhances system resilience and continuity (no funding impact)
19New Stores and Store Growth
# of MEL Requested
FY 2021 FY 2022 Total
New Stores & Store Growth Staffing Plan
New Stores (11 stores per year) 22 22 44
Store Growth 26 26 52
Regional Managers 2 2 4
Appropriation for Store Clerk Conversion
Store Clerk Conversion 25 25 50
Total MEL 75 75 150
20New Building Move
• The cost of the new facilities was approved in a prior Appropriations bill,
however the Authority will require additional funding for the physical move
of employees and warehouse merchandise to the new facility.
• Authority will incur costs related to the address change, modifying &
renegotiating existing contracts and dual operations for security and IT.
• Activities include:
• Warehouse Move
• Staff Move
• Address Change
• Service / Maintenance
• Warehouse / Logistics Contractors
• Related IT Projects
21Store Updates/Store of the Future
Retail Operations
386 Stores and Growing
• Proof of Concept Store
• Create best possible retail space for our customers as well as our employees
• Build and test concept 2020
• Utilize owned property to work out the challenges of a new design and process
• Allows design to become repeatable process
• Roll out to future stores
• Target 10 stores for roll out
• Utilize contractor base throughout the commonwealth to augment our capacity
• Scaled approach for efficiency
• New Stores
• Benefit from the updated design incorporating education, public safety and customer experience
• Continue the path to quicker ROI on new builds through a lessoning of the sales curve
22IT Reinvestment Program
23ABC IT Modernization
• Assessment conducted as part of a 2014 review of ABC’s Operations determined aging IT
infrastructure threatened operations and revenue generation
• Virginia ABC operating outdated systems that are either out of support or soon to be out of support
• Several more major systems, while then ‘compliant’, would become or are deficient – Finance, Point of Sale,
Sales Audit, Inventory Management, Tax Management and HR
• Modernization plan presented to Administration and General Assembly in 2015
• Remediate aging systems and allow for continued revenue growth
• ABC estimated $65 million needed over six years for technology upgrades
• Modernization Projects
• Financial Management System – complete on time and on budget (7/1/2019)
• Departure from VITA CESC – complete by July 2020
• Licensing System – scheduled to launch July 2020
• Point of Sale System – scheduled to complete rollout by mid-2020 CY
• Central Office and Warehouse – scheduled completion 3Q of 2021 CY
24Financial Forecast – Gross Sales
Original Estimate (2015) vs. Revised Estimate (2020)
($ million)
ABC - Gross Sales
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
FY-2015 FY-2016 FY-2017 FY-2018 FY-2019 FY-2020 FY-2021 FY-2022 FY-2023
Original Estimate (2015) Revised Estimate (2020)
25Financial Forecast – Profits
Original Estimate (2015) vs. Revised Estimate (2020)
($ million)
ABC - Profits
$250
$200
$150
$100
$50
$0
FY-2015 FY-2016 FY-2017 FY-2018 FY-2019 FY-2020 FY-2021 FY-2022 FY-2023
Original Estimate (2015) Revised Estimate (2020)
26Expected Life of ABC Systems Compared
to Current System State
Years Used (Normal)
Years beyond Expected Life
Website Ecommerce
Remaining Life
Website Content Management
Enforcement Web Functions
RMS Interact
Major Systems
Core
Point of Sale
Warehouse WMS
Warehouse MHE
Tax Management
Finance Sales Audit
Finance ERP
HR management systems
Identity Management
0 5 10 15 20 25
Years of Expected Life
Licensing project Calendar Q2 2020 POS / Sales Audit project Q2 2020 Future Needs
Covered by Building Project SiteCore Upgrade Calendar Q4 2020
27Point of Sale/Sales Audit
• Entirety of ABC’s Point of Sale and Sales Audit System is end of life / End of support in early 2020.
• System handles over $1 Billion in transactions on 1,000 registers
• Extending current system is not feasible
• Increased Running Costs, Higher failure rates, Non Compliant with security and PCI standards
• Shortage of equipment – delay or prevent store openings – Hard to source obsolete
components
• Minimum Viable Product Implementation in first phase
• Removes Obsolete systems and will be cloud-hosted. Target phase complete mid-2020 CY.
• Future phases will implement added features (Loyalty, Mobile, Omnichannel)
• New system supports modern retailing opportunities (revenue and margin drivers)
• Multi-channel sales (Ecommerce – order management and customer identity / Loyalty)
• Real-time inventory
• Support for customer programs – Coupons, mobile payment, mobile app and ordering etc.
• More economic sustainable footprint (network and support costs, faster, more flexible model)
2829
Site Layout
30Building / Warehouse & Systems
Warehouse – Out of Space & Out of Date
• Warehouse is currently over 100% capacity
• The warehouse MHE (material handling equipment) is near end of life
• The central office is out of office space and is in need of expensive repairs
• 2017 Appropriation Act directed ABC/DGS to develop plan for turnkey solution for future growth
Benefits:
• Resolve the current facilities capacity constraints and provide modern facilities for office and warehouse
• Provide the platform to support ABC’s continued growth
• Increased Shipping Capacity
• Enhanced Ecommerce Capabilities
• New Property:
• 2018 Appropriation Act authorized construction of new facilities
• Pole Green / 295 junction in Hanover; Warehouse (315K Sq ft, includes a case dispenser, two multi-level case
pick modules and bottle pick module)
• Project in progress with target occupancy mid 2021
• Partners
• H&M is the primary contractor; selected via competitive RFP held by ABC/DGS
• Warehouse Management System will be provided by Manhattan Associates
• DGS providing resources on Project Management for construction
31Property Relocation Status Update
• December 30, 2019 – Received the final permit to begin site work
• January 2, 2020 – Began site work
MHE/
Certificate Software
Land Start Site Complete Project
Install MHE of Acceptance
Purchase work Design Complete
June 2021 Occupancy Testing
complete started Feb 2020 Oct 2021
July 2021 August
2021
32Pending Major Projects
• Mandated projects:
• Cardinal Human Capital Management (HCM) Implementation
• ABC goes with second wave – October 2021 (must be ready by March 2021)
• Supports payroll, benefits and basic HCM
• Requires ABC IT resources
• Modernization projects:
• Tax Management (partially funded in 2015)
• Requirements review during 2020
• Project will take ~ 1 year
• HRMS
• Requirements review during 2020
• Project will take 2-3 years for full implementation
• Both to begin FY 2022 (after new HQ /warehouse systems)
• Growth projects:
• Order Management, Ecommerce Shopping cart, Direct delivery support
33High Level Four Year Project Roadmap
2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022
Projects (by Calendar Year) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Cardinal HR / Payroll (MVP)
FMS
Licensing
POS / Sales Audit
Building project
Warehouse Management Timeline Compression
Ecommerce / Loyalty Plan / Prep
Human Capital Mgt (HCM) Planning / Preparation
Tax Systems Planning / Preparation
Merchandizing Planning / Preparation
Licensing Reform (Contingent on legislation)
Procurement Planning Design, Build Test Soft Rollout Go Live Rollout/Implementation Potential Start
34EO19 / Migration from CESC
• EO19 – Cloud Service Utilization and Readiness
• ABC is well positioned to migrate as MOST applications are web based / run on Virtual hosts
• O365, ERP now SAAS hosted. New systems all planned to be hosted at AISn or Azure
• BUT not everything is ‘Hostable’
• Warehouse (low latency – controllers need to be physically near plant)
• Retail: significant customer facing hardware and systems
• ABC will be a ‘Hybrid’ business – Some SAAS, some Azure / AISn hosted and some residual, local systems
• CESC Data Center Migration
• ABC is targeting being out of CESC by June 2020 (prior to ABC HQ move)
• Incremental approach to migration
• Retire systems being replaced
• POS, Reporting, Core
• Rehost persisting systems
• HR, MIPS, Account central, web site
• Infrastructure preparation for ABC HQ move
• Telephony, Network, Identity
• ABC does not anticipate significant new capital projects will be required to migrate out of CESC. Some dual encumbrance costs
are expected as new hosts and services are acquired and commissioned before old hosts are retired – offset by reduced VITA
costs
35Retail Operations
362019 Advertising & Promotional Campaigns
Campaign Year-Over-Year Increase
Spring
Cyber Mom-day (April 29) $662K (e-commerce)
Cyber Dad-day (June 3) $967K (e-commerce)
June
“Summertime and the Mixin’ Is Easy” & $5,051K
Summer Doorbusters (June 1-30)
September
Virginia Spirits Day (Sept 5) $93K
Spirited Bourbon Day (Sept 19) $379K
October
Spooky Spirits Day (Oct 24, 31) $97K
372019 Holiday Advertising & Promotional Campaign
Campaign Year-Over-Year Increase
Web coupon: 20% off one item $25 or more 28,775 redemptions
Doorbusters $288K (+29%)
Black Friday $955K (+13%)
Cyber Monday $550K (+67%)
2,496 orders (+51%)
38Retail Efficiency Developments
• T- Day Process - Implements a stocking process that is done daily in every store and therefore
eliminates out of stocks if the product is in the building, while also alerting central office to items
that are out of stock to assure fulfillment in a timely manner
• Truck Day Process - Efficiency from back door to sales floor touching product maximum of twice with
an organized and methodical approach to how it is placed on the sales floor during the unload
process. Increases availability on shelf of high demand items for customers
• Scheduling Matrix - Utilized sales data and demographics of each store to calculate the optimum
labor needs and staffing requirements. Optimizes customer experience having the right people
working at the right time for that individual location
• SKU Optimization - Space to sales ratio used to clear non productive product from a store and make
room for new and more high demand product. Individual to each store based on that customer base
• Monthly Marketing Program Execution - implemented time to start and path to follow with all
signage and pricing. Cut the time needed to complete the monthly set up in half
• Electronic Customer Survey - Real time feedback enables us to adjust and address concerns quickly
39Tariffs
• US imposed 25% tariffs on certain spirits imports effective October 18, 2019
• Single malt Scotch
• Single malt Irish whiskey
• Liqueurs and cordials from Germany, Italy, Spain, Ireland and the UK
• Supplier reaction
• 100% passed along to retail
• Partial passed along to retail
• Supplier absorbing increase
• US considering increasing tariffs to 100%
• Comment period ended January 13
• Tariff-related price increases reflected on Virginia ABC shelves effective April 1
40Virginia ABC License
Consolidation and Fee
Restructuring
SB389(McPike/Reeves)Subcommittee Request
Virginia Senate Rehabilitation and Social Services Subcommittee
on ABC Laws made a request in a letter dated December 11,
2018 asking Virginia ABC to:
(i) propose a consolidation of licenses,
(ii) explore creation of a Marketplace license,
(iii) analyze licensing fees,
(iv) include relevant stakeholders in the process, and
(v) include a review of an Agritourism license*.
*The request to review an Agritourism license was made during the 2019 Session of the Virginia General Assembly.
42Wine & Beer Off Premise
Restaurant Gourmet Grocery Convenience Drug Delicatessen Gift Shop
Shop Store Grocery Store Store
Pharmacies
Grocery Stores
Gas
Stations
Delis Delis
43Project Approach and Stakeholder Engagement
Approach Engagement
• Allocated project team to drive the study and • Created
conduct research – License Reform webpage
– License Reform electronic mailbox
• Identified subject matter experts (SMEs) to
– Stakeholder distribution list
discuss options for reform, review research
– Stakeholder survey
findings and make recommendations
• Meetings
• Steering Committee established to review, – SMEs met weekly
discuss, and decision recommendations – Steering Committee met monthly
resulting from internal and external – Six large group meetings held with external
stakeholders stakeholders (including industry specific sessions)
– Nine individual meetings held with external
stakeholders
– Two Industry Association meetings held
44Guiding Principles
• No licensee loses privileges currently held
• Recommendations maintain policies based upon three-tier model
• Reduce complexity of the licensing structure
• Fee amounts guided by objective analysis of workload created by
license or permit category
• Fee revenue only to be used to support regulatory services to
licensees
• Regular cadence to examine fee amounts
45High Level Recommendations
• Restructure current licenses and privileges to reduce complexity
and duplicative processes
– Standardize certain privileges
– Implement consistent qualification standards.
– Organize based on Three-Tiers
• Create a Marketplace license to allow the complimentary service of
beer or wine as a secondary gratuity to an ongoing enterprise.
• Standardize the fees and renewal requirements for permits.
• Increase license fees to provide enhanced services to licensees.
46License Consolidating, Restructuring and Standardizing
• Consolidating
– Reduced the number of licenses by more than 50%
• Standardizing Privileges
– Most Mixed Beverages licenses now include wine and beer on-and off-premises (formally
just on-premises)
• Excludes caterers licenses and one day and annual special events licenses
– No longer just an on-premise beer license; license includes both wine and beer
– Consistent sample/tasting serving sizes
– Keg, delivery, and tasting* privileges included for all Retail Off-premises licenses
• Restructuring
– Expanded seating capacity tiers
– Previous Retail On-premises licenses now include On-and Off-premises (off-premises
applies to wine and beer)
– * Tasting privileges are included for all Beer and Wine Off-Premises licensees except the Gourmet Brewing Shop and Confectionary license.
47Grocery Store Licensee Options
Example –Traditional Grocery (i.e. grocery store without restaurant or bar)
Current State – Retail Future State – Retail All Other
• Wine Off-Premises • Beer and Wine Off-Premises
• Beer Off-Premises – This license includes Delivery
and Keg privileges.
• Beer and Wine Off-Premises – Includes Tasting privilege*
• Gourmet Shop
• Delivery Permit
• Keg Permit
*Tasting privileges are included for all Beer and Wine Off-Premises
licensees except the Gourmet Brewing Shop and Confectionary
license.
48Proposed Marketplace License Description
A business which:
1) Is eligible to provide a customer up to two complimentary drinks per day,
with a drink defined as 12 ounces of beer or 5 ounces of wine to be served in
accordance with the code and/or regulations,,
2) Provides goods and/or services in a personalized experience for a bona fide
customer,
3) Is staffed with personnel with expertise in the goods and/or services
provided,
4) The goods and/or services offered must fall into a single category or
classification, and
5) The business or establishment does not otherwise qualify for any other
license type (e.g. restaurant, convenience store etc.).provide up to two 12
49Proposed Marketplace License Criteria
Criteria to be Considered for Approval
• Duration customers spend at establishment, based on primary product or services
offered
• Hours of operation of the establishment
• All employees have participated in required RSVP/MART or ABC-approved training
• ABC manager is on premises at all times
• Alcohol purchases are only made through a licensed wholesaler or Virginia ABC
• License Fee $1,000 per year and only allows for the serving of beer and wine
• Other requirements deemed necessary by the Board to protect health, safety or
welfare
50Proposed Permit Structure
• Seventeen types of permits administered by Virginia ABC. Currently only 7 have a fee
associated with the permit.
• Application fee of $50 to be charged
• All permits classified into the following two levels and the associated annual issuance
fees be charged
– Level I permits - $50
– Level II permits - $350
• All permits required to be renewed annually, except those that are for a specific act or
time period (i.e. Import Personal Alcohol Permit, Continuity of Operations (COOP))
• The application and issuance fees for the Import Personal permit waived for active duty
military who provide documentation of their transfer orders
• Distinguishing definitions and two separate permits for inactive and active stills
51License Fee Reform
• License Fees reviewed in a comprehensive manner.
• Proposed fee increases - approximately $2.5M to support enhanced,
proactive licensee assistance and compliance and enforcement:
• New position of investigative analyst is requested—16 new positions
allocated across the Commonwealth
• Two additional forensic or financial analysts requested
• Eight new special agent positions created
• Rationale: Reduce the sworn law enforcement agent to licensee ratio
• Creates greater flexibility for sworn officers to focus on law
enforcement matters and provide greater proactive compliance
assistance with new analyst positions
52You can also read
