In an effort to recapture what could be $13 million of profits and taxes lost to liquor sellers in the District of Columbia, Maryland and at military installations, the Virginia Alcoholic Beverage Commission announced yesterday it would start flexible pricing schemes in 10 selected stores July 1.
The pricing change, restricted to Northern Virginia stores in the Washington suburbs, will take the form of Thursday-to-Saturday specials--similar to those that Montgomery County stores already offer--on a selection of distilled spirits. Wine prices will remain unchanged.
Virginia ABC stores do not carry beer.
ABC commissioners declined to set out what specific new prices will be in the stores, but they did say discounts will fall within the 5 to 20 percent range for selected items. They said it was not their intent "to match the competition penny for penny." The new pricing is experimental, and the duration depends on the program's success.
A survey of more than 407,000 Northern Virginia households conducted in December last year showed 30 percent of those who bought distilled spirits did so in the District of Columbia, said Robert J. Grey Jr. of the ABC.
Grey said Virginia could be losing as much as $13 million in profits and taxes by customers buying their liquor elsewhere, adding that more than 75 percent of those who bought in the District said the most important criteria for selecting where to buy liquor were price and location.
District liquor merchants seem undaunted about the upcoming Virginia price change.
The Virginia ABC stressed that it is not trying to provoke a price war, since price-slashing could lower the amount of revenues going to the state.
"We can't go any lower," said Marshall Tanhoff, owner of Gillies Twenty-One Liquors in Georgetown, where many Virginia residents cross the District line to buy liquor.
George Diamond, owner of Eagle Wine & Liquor, also in Georgetown, said his prices are so close to cost that if he lowered them further, "someone would have to subsidize us."
"I don't think my business is going to be affected one iota," said Jeffrey Gildenhorn, owner of Circle Wine & Liquor near Chevy Chase Circle.
"Our sole objective in doing this is to get our Virginia people to buy their spirits in Virginia," said Thomas L. Weedon Jr., director of information for the commission. He added that since ABC funds are used for general revenue and by localities in the state, it would be beneficial to capture as much of the Virginia market as possible.
Net profits for Virginia's Department of Alcoholic Beverage Control, which the ABC commission oversees, have declined for fiscal years 1981 and 1982. Nine-month figures (July 1982 to March 1983) show that in terms of gallons sold, business is down 4 percent in this fiscal year, Weedon said.
To publicize the price changes, Virginia ABC stores will begin advertising for the first time in Washington and surrounding suburbs, Weedon said. Grey specified that these advertisements will not resemble normal liquor store displays, but will look more like low-key institutional announcements.