Since the 1930s, the government of Virginia has been in the alcohol business. But the future for the industry looks anything but smooth.
The booze biz is going bust. According to the latest revenue forecast from the Virginia Alcoholic Beverage Control Authority, profits are expected to be down about $30 million this year. Megan Hess at Washington and Lee University says part of the economic decline is generational.
"The industry is suffering from changing consumer preferences. Young people are either not drinking alcohol at all or choosing to drink canned drinks that are a mix of seltzer and spirit," Hess says. "So, as the consumer tastes have changed and shifted away from hard alcohol, it is going to make profits in this space much harder to achieve."
But that's only part of the story. Another important factor is tariffs.
"You can't buy a Scotch worth drinking that's made in the U.S.," says Bill Leighty, who worked for a state senate finance chairman before becoming chief of staff for two governors.
"As a Scotch drinker, I can tell you that I would cut back on Scotch rather than buy a lower-quality Scotch. So, I might be buying less of it. But more importantly, the normal amount that I usually consume is being impacted by the tariffs because that is a direct cost to the consumer."
Virginia's profits from the alcohol monopoly may continue to decline, but starting next year the budget will have new revenue from the latest sin tax: legal sales of regulated marijuana.
