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Orr said the commission would consider the ABC employees who could be put out of work. An official at ABC said a starting store clerk earns about $10 an hour plus benefits.

They could receive severance pay or a preference if they wanted to become a private licensee, Orr said.

He said he foresees an open, transparent bidding process, and the licenses wouldn't be issued in perpetuity.

"You're not getting a license forever," he said.

Gov. Robert Bentley is considering ABC store privatization, but hasn't made a choice, spokeswoman Jennifer Ardis said.

Flowing Revenue

Based on the Alabama Alcoholic Control Board's most recent annual report, its ABC stores put a 30-percent mark-up on each bottle of liquor, 5 percent of which goes to the state General Fund and the rest going to board expenses.

In addition, a 56-percent state tax is charged.

In budget year 2011, alcohol sales generated about $200 million for the General Fund, the Education Trust Fund and the state human resources and mental health departments, said William Thigpen, assistant administrator to the control board.

Thigpen said that number would be significantly lower if private industry ran all liquor sales.

"There is no way that privatization can give them that consistent of a revenue stream," Thigpen said. "This is a very unusually efficiently run business."

It's also growing. Six or seven ABC stores have opened within the past 18 months, he said.

Orr argues that tax revenue the state receives should not change just because private business is making the sales. His bill will not include a tax increase or changes to the existing tax structure.

About 525 private-owned package stores already handle about 25 percent of liquor sold in the state, according to the board's annual report. They buy the liquor from the state and their sales contribute to that $200 million a year, Thigpen said.

That $200 million includes money generated through beer and wine sales, which are not available in ABC stores.

While prices at ABC stores are fixed -- a bottle of Jim Beam costs the same whether bought in Florence or Decatur -- the board does not have control over private store mark-ups.

Most of the alcoholic drinks Alabamians are buying -- beer and wine -- are sold in grocery stores. Beer accounts for more than 50 percent of alcohol sales nationally, Gilroy said. Throw in wine, and those two are the "vast majority."

"So what are you really controlling?" he said. "A tiny piece of that market ... Moving forward with any type of privatization is not a loss of control. What are you losing? A big bureaucracy."

Beyond the cost savings that Orr said privatization would bring, he said there's another question.

"Should the state be in the liquor distribution business in the 21st century? I think the answer is no," he said.

Gilroy said it is difficult "to make the case that government can run a business better than private industry. If that were the case, why doesn't the government run all the grocery stores?"

Thigpen balks at the analogy.

"Groceries and alcohol are two different things," he said. "Alcohol is a drug, a very strong drug, and it needs to be regulated.

"I'm not going to tell anyone how much toilet tissue they can buy."

By the Numbers

There are 172 ABC liquor stores in the state. Expenses related to operating the state-run stores:

2009 $45,304,595

2010 $47,311,430

2011 $46,578,162

Source: Alabama Alcoholic Beverage Control Board, 2011 report

Distributed by MCT Information Services