Control State Profile: West Virginia

Pictured atop: Front: General Counsel Anoop Bhasin, IT Director Randy Haynes, Commissioner Wooton and Beer Division Admin Cindy Clark. Middle: Spirits and ine Division Admin Kim Hayes, Executive Secretary Lynn Patrick, Spokesman Gig Robinson, Deputy Commissioner Terry Greenlee and Comptroller Julia Jones. Back: Enforcement Division Director Tim Deems and Licensing & Education Administrator Shawn Smith.

Control states often juggle many competing priorities. For the West Virginia Alcohol Beverage Control Administration (WVABCA), public safety is always at the top of the priority list. While continuing to advance and expand programs designed to protect people (especially youth) from the dangers posed by illegal alcohol use, West Virginia has also managed to increase its revenue exponentially.

Propelling Growth

As part of West Virginia’s Department of Revenue, the Charleston-based WVABCA privatized all of its retail stores back in 1990 and currently acts as a licenser, wholesaler and enforcer. The agency’s 79-person staff manages nearly 5,000 retail licenses and approximately 1,500 non-retail licenses. Although it’s one of the smallest states in the nation, West Virginia has experienced consistent growth in the beverage alcohol industry for a number of years. During the 2018 fiscal year, the agency contributed $23.6 million to the state’s general fund and increased bailment revenue by more than $4.3 million.

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These agency enhancements have evolved under relatively new leadership. Commissioner Fredric L. (Fred) Wooton was appointed to his role by Governor Jim Justice in February 2017, shortly after Justice took office himself. No stranger to the WVABCA, Wooton has spent 28 years with the agency, first as an inspector and then in a variety of enforcement agent and supervisory positions under six previous WVABC commissioners. Prior to that, he spent a decade working in the food-and-beverage industry, where he gained hands-on experience working behind the bar counter.

Wooton stepped into the commissioner role during an important time of transition for the state. He credits Governor Justice with stabilizing West Virginia’s economy and expanding revenue streams. A statewide focus on growing tourism has been a key part of West Virginia’s recent economic turnaround, and it’s had a positive impact on the beverage industry as well.

Legislative changes in 2017 modified the state’s Class A private club licenses, allowing licensees operating larger tourist destinations and resort facilities to obtain one private license for alcohol sales and consumption within designated areas across the entire premises, rather than requiring a separate license for various parts of the property. The new private club license is more expensive than its predecessor, and licensees must have a minimum of 10 acres of land in order to qualify. Approximately 10 of these new licenses have been granted to date.

“This new license makes it much easier for our licensees, as these licenses can now cover up to 20 venues at a single resort,” Wooton explains. “This is the first major change our state has seen in private club licensing in more than 50 years, and our licensees now have a lot more freedom and flexibility because of it. It’s also better for tourists, who can now more easily travel through different areas of a resort while responsibly consuming alcohol.”

Another major legislative win for the WVABCA was the bill allowing the retail sale of liquor bottles on Sundays, which had previously been prohibited. The new law went into effect in March 2019, and the agency reports sales numbers have already increased dramatically due to the 51 additional selling dates permitted each year (bottled liquor sales are still prohibited on Easter Sunday and Christmas Day).

Additional recent legislative changes in West Virginia include the maximum allowed alcohol content by volume (ABV ) for beer increasing from 12% to 15%, which came at the request of the growing number of craft breweries across the state. A new “brunch bill” allows on-premise license holders to begin alcohol sales at 10 a.m. on Sundays instead of at 1 p.m. New types of licenses were recently introduced, including private hotel licences, private nine-hole golf club licenses, private fair and festival licenses, one-day charitable beer licenses, and private wine college stadium licenses.

In certain circumstances, some license holders are now permitted to offer bottle service, complete floor plan extensions, incorporate curbside delivery, use frozen drink machines and offer growlers and samplings. Wine baskets may now be delivered across the state, and alcohol sales are now allowed at college athletic events for NCAA Division II and III teams (only Division I events were permitted previously).

Wooton says all these changes are largely due to Governor Justice’s strong leadership across the state. He also thinks the new legislation benefits the residents of West Virginia and beyond.

“We’re committed to working closely with our state’s tourism industry, with our licensees and our other partners to help advance alcohol laws to keep up with current tourism trends and the needs of the beverage alcohol industry,” he says.

All of these changes have helped contribute to increased sales. During the 2018 fiscal year, sales increased by 4.45% from the previous year, and case sales were up by 1.7%. Spirit sales in West Virginia exceeded $100 million for the first time in history last year – a very large dollar amount for such a small state. The WVABCA also raised the mark-up on spirits from 28% to 32% in May 2017 – the first increase of its kind in 14 years.

WVABCA staff are dedicated to working closely with alcohol vendors, state liquor representatives, licensed retail liquor outlets and wine retailers to provide the best possible service and selection to consumers across the state.

The WVABCA’s annual fall trade show is a key event that brings together retailers and suppliers to discuss industry trends and new products.

“This is a big event that’s held over two days, and retailers can take advantage of exclusive discounts offered by manufacturers and distributors,” Wooton says.

Trade show attendees also benefit from exchanging ideas and information, and the trade show generates approximately $8 million in liquor sales each year.

Sales in West Virginia increased 4.45% during the 2018 fiscal year, with spirits topping $100 million for the first time.

Safety and Education

Although the WVABCA is experiencing widespread growth across the industry, the agency hasn’t lost sight of its core purposes, which are enforcement and education. Numerous programs have been developed to aid in these efforts, the majority of which focus on the prevention of underage drinking.

In June 2019, the agency held a ribbon-cutting ceremony to unveil its new DUI simulator, funded by grants provided by State Farm Insurance, the National Alcohol Beverage Control Association (NABCA) and the West Virginia Governor’s Highway Safety Program. The simulator program has been operational since 2010, and gives young people an opportunity to experience the challenges drivers can encounter when operating a vehicle at var- ious blood alcohol content levels. The DUI simulator travels to many schools across the state and is used as part of a program that also contains a classroom education component and data collection to help inform future prevention programming. The new DUI simulator replaces the agency’s older model and is both larger and more technologically advanced than its predecessor.

“Our staff describe it as basically going from an Atari to an Xbox,” Wooton explains. “It really gives people a physical experience that resonates with them well after the fact and stresses the dangers of driving under the influence.”

Since the program’s launch, the DUI simulator has reached more than 54,000 people (most of them students). The simulator is also used at various events throughout the state.

Another top outreach effort is the agency’s NO School Spirits public service announcement (PSA) contest, which has been in place for the past six years. A program that focuses on stressing the dangers of underage drinking and driving, NO School Spirits encourages middle and high school students to create and submit videos that address issues related to drinking and driving.

This year, more than 150 students from 20 schools across the state competed for the top $5,000 prize and a chance for their video to be turned into a televised PSA that ran during the spring months around prom and graduation season. Second and third- place prizes are also awarded, and all monetary awards are given to the school to be used primarily for programming related to underage drinking and prevention. The NO School Spirits program is funded by State Farm Insurance, NABCA and the West Virginia Governor’s Highway Safety Program.

A brand new prevention program called the Myers Manual officially launched in July 2018. Named for Kurt Myers, a 15-year-old West Virginia resident who died from alcohol poisoning in 2012, the Myers Manual is a tool designed to em- power youth by providing them with increased knowledge of the effects of alcohol, helping them learn how to identify the signs of acute alcohol poisoning. The free, downloadable re- source was also shared with prevention officers across the state so they can incorporate the information into their individual school training programs.

Enforcement is a huge component of the agency’s work. WVABCA staff across the state manage licenses, investigate complaints and perform routine compliance checks, along with offering educational opportunities for licensees.

One example is a series of online training videos geared to- wards educating on- and off-premise licensees about how to accurately identify underage individuals with fake IDs and pre- vent overservice. In 2017, the agency piloted a new technology designed to detect fake IDs. The full program known as the Intellicheck Age ID app was rolled out across the state in 2018. It allows enforcement agents to easily scan IDs and identify falsified documents. In the past year, the app was used to scan more than 2,250 IDs Nearly 350 IDs were identified as fake, altered or borrowed.

Additional partnerships with various law enforcement agencies, colleges and universities, and community groups across the state allow the agency to cross-promote respon- sible serving and consumption messaging.

Looking to the Future

A key undertaking for the upcoming fiscal year is overseeing the WVABCA liquor retail outlet store license rebid project. Every 10 years, the agency coor- dinates the rebid process in partnership with the state’s Retail Liquor Licensing Board (RLLB), and offers the renewal of licenses to the existing 181 retail liquor outlet store licensees prior to opening them up to the general public.

In early 2019, the RLLB convened to review the state market zone map, deter- mine the number of licenses in each zone and work with an external accounting firm to establish minimum bid amounts for each license. The initial purchase option is scheduled to go out in July 2019, and the process of bidding out the other licenses will begin in December 2019. In July 2020, the new licenses will be issued, which is expected to generate $40 – 45 million in revenue for the state.

Along with the rebid process, Woo- ton and his team will continue working to identify ways to improve agency processes that enhance safety and enforce- ment efforts and maximize revenue.

“I strongly encourage directors, department heads and other key staff to take advantage of the resources provided by NABCA,” he says. “Change is the one constant, and we must stay ahead of the curve. The alcohol beverage industry con- tinues to evolve, consumer preferences are more dynamic and new technology and the changing political landscape all re- quire us to leverage our assets. You can’t fear or be resistant to change. Acknowl- edge it and move forward, even if it is in small steps.”

Melissa Sherwin is a freelance „writer and marketing commu- nications strategist from Chicago, IL. Her work has appeared in Chicago’s Daily Herald newspaper, Time Out Chi- cago, Suburban Life newspapers, and various magazines. She is also the author of several children’s books. Follow her @MelissaNSherwin.

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