Military Exchanges: Exchange Service Management of Army and Air Force Package Stores

Pursuant to a congressional request, GAO reviewed the Army and Air Force transfer of their wholesale and retail alcoholic beverage operations to the Army and Air Force Exchange Service, focusing on: (1) whether the Exchange performed an appropriate economic analysis to justify its delivery, storage, and distribution of distilled spirits; (2) the reliability of the Exchange's estimated per-case freight and handling costs; (3) whether the transfer produced increased revenues as expected; and (4) how the transfer affected shelf prices of distilled spirits.