Why Virginians pay more for liquor

Since 2018, Tito’s Handmade Vodka has been the top-selling spirit in Virginia. But here in the Old Dominion, drinkers appear to pay more for a bottle than in nearly any other state in the nation, according to an informal survey of liquor prices by Axios Local correspondents.

What's happening: Virginians pay $39.99 for a 1.75 liter bottle, or a handle, of Tito’s, the sixth-highest price in the country, according to our survey.

• Our findings suggest Indiana pays the least: A handle of Tito’s can be found at Total Wine there for $19.69.
• Oregon, where the state operates liquor store monopolies just as in Virginia, pays the most at $49.95.

Why it matters: Booze is big business in Virginia. Revenue from liquor sales fills the state coffers.

What we did: We and our Axios Local colleagues checked prices in a major city in 49 states to see how much a handle costs in state-run vs. privately operated liquor markets.

Zoom in: Virginia's high prices extend beyond Tito's, per our informal survey.

• For Jack Daniel’s No. 7 — the third top seller in the Old Dominion — we pay $51.99, the third-highest price in the country, even among other states with state-run stores.
• Among state-run liquor markets, only Alabama is more expensive: $52.49.

Yes, but: While mass-produced, popular liquors tend to be priced higher here than in states with private stores, limited-edition spirits, like Pappy Van Winkle, tend to be priced far lower because Virginia ABC has to stick to one pricing formula for everything.

How it works: “The [Virginia ABC] board has responsibility for markups,” Virginia ABC CEO Travis Hill tells Axios.

• And Virginia ABC hasn’t changed the markup since 2015, which means Virginians have been paying the same price for a bottle of Jack or Tito’s for nearly a decade.

For pricing Virginia spirits, ABC starts with the case cost from the producer. From there, markups are set by:

1. Size (the bigger the bottle, the less the markup, generally).
2. Proof (one price for 125% or less, higher for over).
3. State tax based on type (20% added for distilled spirits, 4% for low alcohol).