Around the turn of last century there was national awakening among the Icelandic nation. Along this revival the general opinion rose among the nation that alcohol consumption was so excessive that it could hinder progress in society. Discussions about alcohol consumption led to a referendum on banning all production, consumption and import of alcohol. The „ban“ was then implemented in 1912 and lifted partially in 1922. An exception was made and Icelandic fishermenn could sell Spaniards bacalao for spanish wines. Import was later permitted if the strength of the alcohol was under 21%. Beer was however still banned.

The State Liquor Store –(ÁVR) - was established in 1922. The first director of the operation was appointed February 3, 1922 and that day has been considered the date of foundation ever since. The state established monopoly over tobacco in 1932. These two operations were merged in 1961 under the name State Alcohol and Tobacco operations (ÁTVR). The operation began production of alcoholic beverages in 1935, but stopped all production in 1992. All manufacturing equipment was subsequently sold to private companies. The best known brand, Brennivín, which from the beginning has been called the „Black Death“. Beer was sold again on March 1, 1989.

ÁTVR has produced snuff since around world war II. Icelandic snuff is considered very special in comparison to other similar products on international markets. Methods of production has been virtually unchanged for half a century. In 1922, outlets were opened in seven towns in Iceland: Reykjavík, Hafnarfjörður, Vestmannaeyjum, Ísafirði, Siglufirði, Akureyri og Seyðisfirði. Around the middle of last century, the stores in Hafnarfjörður, Vestamannaeyjar og Ísafirði were closed again for several years.

Until 1986 all deliveries were made „over the counter“ or until the first self-service store was opened in the shopping center Kringlan. Today, most of the outlets are self-service and only the smallest outlets are serving „over the counter“. ÁTVR stores has increased steadily in recent decades and are today 50 all over the country.  In the capital area there are 13 stores and 37 in other municipalities. In addition it is possible to purchase from the web shop on vinbudin.is and get the products  in any of Vínbúðin´s outlet completely free of charge.