Virginia’s New System for Selling Allocated Bourbon Just Rewards Corruption, Cronyism

If you examined how the state of Virginia runs its liquor sales industry devoid of any other outside context, you would undoubtedly come to the conclusion that selling allocated bourbon whiskey brands must be one of the single most difficult propositions on Earth. What other explanation could there be for the number of times within the course of the last three years that the entire state’s policies for selling these products have been fundamentally altered, reversed or reimagined? How else to account for an organization (the Virginia ABC) where allocated bourbon sales statewide were halted entirely for a month at one point, with the organization subsequently rocked by felony corruption convictions, statistically impossible lottery results, multiple federal whistleblower settlements, and a sprawling embezzlement scheme? If you saw all that, what other conclusion could you possibly draw other than “This must be too hard for any state to get right”?

But wait, what’s that? Other states … don’t have these issues, and simply manage to sell rare whiskey in a simple, orderly manner? But if that’s the case, what the hell is Virginia’s problem? And trust me when I say, pretty much every whiskey geek living in the Old Dominion would love to know the answer to that question, particularly after the state abandoned its latest system for selling allocated bourbon yet again (after less than a year), today announcing yet another new system that looks inevitably poised to empower more corruption statewide. You’d think that there would be some kind of desire within the Virginia ABC as an organization to at least appear to be decreasing the opportunity for store employees to engage in illegal activity, would you not? Instead, it’s somehow the opposite, as the new policy will (in my opinion) directly incentivize employees at every level of the organization to use their insider knowledge for both cronyism and personal profit. You thought you’d seen corruption? This new policy seems tailored specifically for the sake of corruption, and the incredible thing is that the organization is acting totally unaware that thousands of consumers would immediately call them out on it. No, seriously–go look at the user reaction on the Virgina ABC’s Facebook page if you want to get a quick gauge of how people are reacting to this news.

Names removed to protect the justifiably pissed off consumer.

It’s bad, folks. And in order to explain precisely how bad, allow me to get you up to speed on just how thoroughly bungled allocated bourbon (and other spirits) sales have been in Virginia for the last few years.

Virginia’s Many Whiskey Problems

When I first moved to Virginia it was 2019, and shopping for spirits was a novel experience for me here because I had never lived in a “control state” before, i.e. a state where all liquor sales are operated through official, state-run stores. In Illinois, liquor is incredibly easy to access, being available via gas stations, grocery stores, etc., all of whom stock whatever they think will sell. In Georgia, things were much the same, with a few quirky wrinkles. But Virginia controls liquor access much more tightly, ostensibly for reasons related to public health, but practically because the taxes on liquor sales make up a very large chunk of the state’s annual budget. For this reason in particular, Virginia is always going to be an ABC state–they’re not going to ever give up that revenue.

I’m not going to make an argument that a state-run system is entirely inferior, though, because it does inherently have several genuine benefits for the consumer. For one, it makes access to certain commonplace products more universal and convenient, because every store in the state has more or less the same inventory. And importantly it keeps prices fair, right around MSRP, rather than the massive retailer price gouging that the American whiskey market in particular has experienced in the last few years. This means that if you can find a product in Virginia, then you can buy it for retail prices, which is obviously a win for the consumer.

The issue is finding anything remotely more rare on shelves, because anything that is seen as desired is snapped up instantaneously, statewide. Why are people so eager to get these bottles, seemingly more so than in other states? Well, beyond the fact that consumers inherently want anything “rare” more than anything they can easily obtain, it’s because the bottles are being sold at MSRP, but have street value/secondary market value that can often be much higher. This means that a bottle selling at the Virginia ABC for $50 or $100 (depending on the brand) can potentially be “flipped” immediately by the buyer to other collectors for 200%, 300%, 400% or higher returns. And this gives those “flippers” an immediate incentive to snap up as many allocated bourbon bottles as they can. This battle, between the state and the flippers, and the regular consumers and collectors caught between, has fueled the past three years of constant turmoil in how spirits are sold in Virginia.

Prior to the pandemic, allocated whiskey brands were sold by Virginia ABC locations immediately when they arrived at the store–a truck would arrive once or twice a week, new stock would come with it, and store employees would put that stuff out on the shelf. This led to whiskey collectors/flippers learning which days a truck would typically be at any given store, and then it was simply a matter of arriving early to wait in line before that store opened. You never knew for sure that any certain product would be there when the doors opened, but the fanatical collectors rarely cared. They’d stand in line for hours before opening, in order to get something particularly sought-after. It wasn’t an ideal system, but it could theoretically reward you if you had the patience or availability to wait in lines.

Perhaps not wanting to deal with these line-waiting consumers every week, the Virginia ABC started a series of shakeups in 2022 that radically changed how allocated products were being sold in the state. Instead of simply delivering bottles to the shelf whenever they arrived, the ABC began holding onto entire shipments in its warehouses, choosing specific times to release an array of allocated products at specific ABC shop locations. This system of “random drops” rolled out in 2022, and customers were told to sign up for email or social media updates, which would inform them when certain stores were given the green light to sell whichever allocated items they had in storage. Effectively, this meant you’d be sitting around on a weekday afternoon when all of a sudden an email might arrive saying that the ABC store a mile away was now selling … something allocated, and that consumer was invited to then race to the location to see what it might be. Predictably, this made for some chaos, but it also gave the average consumer a legitimate chance to find some bottles they would otherwise perhaps have had to camp out in front of an ABC store to acquire.

An example of some of the types of allocated bourbon brands sought both by drinkers and flippers.

In 2023, this system changed again, as the Virginia ABC stopped the focus on social media–probably because they were constantly being harangued about allocated bourbon availability–and instead introduced a text message system that would theoretically inform the consumer whenever random drops occurred. However, at this time those drops became sporadic and seemingly infrequent, and I doubt I received more than half a dozen texts informing me about random drops over the course of the last year. This is no doubt partially due to the fact that the ABC also simultaneously continued several other methods of distributing certain rare bottles, including the lottery system (which infuriated consumers when it gave impossible, seemingly fraudulent results), and special weekend drops of allocated bottles announced in advance, which gave the opportunity for the line-sitters to occasionally return.

Now, the Virginia ABC is disposing of the text message system entirely, while keeping the random drops. That is to say, they’ll still be putting allocated bourbon and other spirits out on shelves at “random” times every so often, but the plan announced today is to not bother informing consumers when they do so. I suppose the optimistic idea is that you’ll simply walk into an ABC store one day while running errands and there will be a bottle of E.H. Taylor Single Barrel sitting there on the shelf, calling out to you with its siren song. Sounds beautiful, right?

But sadly, we know better than that, don’t we?

A Playground for Cronyism

If there’s one thing that the Noble Experiment of Prohibition in the U.S. taught us, it’s that those with access or control over a valuable resource will always find a way to profit from it. What was the best job to have during the Prohibition era in the U.S.? Why, it was to be an official Prohibition Agent, of course–not because they pulled down impressive salaries from the federal government, but because it was incredibly lucrative to be in a position where your actions could control the flow of a valuable resource, in this case booze. Prohibition Agents found themselves swimming in an ocean of effortless graft, because everyone and their mother wanted the access they could provide. Bootleggers paid them off. Tavern and speakeasy proprietors paid them off. Cops paid them off. Regular citizens paid them off. Why wouldn’t you have attempted to get the job, when there were so many incredible fringe benefits and ways to make a buck? Suffice to say, it wasn’t exactly a gig that was attracting squeaky-clean applicants.

With the Virginia ABC pulling its text message system to inform consumers about allocated bourbon drops, many of the organization’s employees now find themselves in newly minted, similarly lucrative positions, whether or not they’ve even realized it yet. If you’re a store employee, and you want that bottle for yourself? Just tell your friend to be ready for your message, and inform him the moment word comes down from the corporate office to put your allocated products on the shelf. Your friend rolls in to buy the bottle, and you collect it from him at a later date. Your confederate can honestly even take his time in getting there, because none of the other consumers will know that those allocated products are now being offered, unless they happen to be in the store by random chance in that moment. Would this be against Virginia ABC policy? Sure, I can only assume it would be. But who in the organization would possibly be checking to somehow ascertain whether the people buying bottles are friends or acquaintances of store employees? Any “risk” to the employee is effectively nonexistent, so what is to stop them from exploiting their inside information?

But it’s not just the threat of ABC employees keying in friends and family to take advantage of the Virginia ABC’s inexplicable new system that is so concerning. This new system is also a potential GOLD MINE for the flippers in the audience, a more efficient way than ever for them to be the only ones in the entire state who are laying hands on most limited edition whiskey releases. Because when your local ABC store gets permission to put out its allocated products, who do you think is going to be receiving the fastest surreptitious texts letting them know to get down there? That would be the flippers, the people who have an economic incentive to offer a little something in return to ABC store employees. It’s not hard to imagine how a flipper could cultivate an entire local network of ready and willing ABC recruits to tip them off about rare bottles, and even cut them in on a percentage of the profits. It would be more shocking, in fact, if this didn’t immediately start happening. Remember, we’re talking about products that are often being resold on the secondary market for 300-500% of MSRP. For the committed, flipping bottles can be something between a hobby and a full-time job.

This has been an incredibly tumultuous few years for the Virginia ABC.

In case you think any of that sounds paranoid: We’ve already seen this exact scenario play out within the last two years. In 2022, a Virginia ABC lead sales associate plead guilty and was convicted of felony computer trespass charges, after being discovered leaking inventory information to a Virginia whiskey scene profiteer. The man, armed with the knowledge of which bottles would be going to which stores on which days, then established a lucrative business of selling that information to Virginia bourbon obsessives over social media–whiskey collectors would pay him, and he would inform them of when and where bottles would be sold, allowing them to swoop in and collect the rarest prizes for themselves.

Meanwhile, just this week, the Virginia ABC also reportedly settled two federal whistleblower cases from former employees, one of which alleged that the organization had effectively covered up millions of dollars in losses in recent years caused by employee theft and other forms of corruption. Is it any wonder that we’re not exactly giving them the benefit of the doubt here?

At the end of the day, that’s the hardest thing to believe about this situation; the sheer brazenness of the move to once again alter how the state distributes this sought-after allocated bourbon, at a time when so much attention has already been drawn to the myriad scandals within the Virginia ABC. At a time when the felony conviction of that sales associate is still fresh in mind, in the SAME WEEK that the whistleblower settlements are being reported in the local Richmond media, this is when the Virginia ABC thought it would be a good idea to announce a new system that has obvious, glaring vulnerabilities to the exact same type of potential employee profiteering and cronyism? Do they think that no one will notice or highlight just how badly this new version of the system will no doubt be exploited? Or do they just not care? As ever, it seems that the organization has underestimated the zeal and mania of the state’s whiskey geeks, and I doubt they’re ready for the tsunami of recriminations that is no doubt headed their way.

As for the rank and file spirits consumer in Virginia, well … they’re just getting screwed over by the state. But that’s nothing new.

Jim Vorel is a Paste staff writer and resident beer and liquor geek. You can follow him on Twitter for more drink writing.