Amid what’s become a perennial push to privatize liquor sales in North Carolina, state lawmakers are considering a change to allow ABC store sales on Sundays and to let grocery stores sell some pre-mixed cocktails.
Supporters say they want to modernize the system of state control over liquor. Most North Carolina liquor laws are a relic of the post-Prohibition era. Over the last 90 years, the statutes have only been updated in bits and pieces.
One Republican lawmaker has echoed the calls of restaurant and bar business groups to fully privatize liquor sales. But the legislation proposed with the most potential for broad support centers on smaller changes, including allowing “happy hours” for the first time in North Carolina.
Where did North Carolina’s system of Alcoholic Beverage Control (ABC) come from?
In the early 20th Century, North Carolina had no tolerance for alcohol.
North Carolina was the first in the country to pass a referendum on Prohibition in 1908, taking effect in 1909. And when the 21st Amendment passed in 1933 – ending Prohibition nationwide – North Carolina voters rejected a statewide convention to ratify it.
Two years later, the legislature relented. Lawmakers passed a bill in 1935 allowing a handful of counties to vote on whether they would allow liquor sales under the strict control of a new agency, the Alcoholic Beverage Control Commission. Soon, the state’s first liquor store opened – on July 2, 1935, in Wilson. The store sold 825 bottles of booze that day.
Then, lawmakers passed a measure in 1937 called the Alcoholic Beverage Control Act, allowing all counties and cities to establish liquor stores if their voters approved them. It wasn’t until 1978 that they passed a law allowing bars and restaurants to sell liquor by the drink.
Graham County voted to ban alcohol in 1948, but voters in the town of Robbinsville narrowly voted to approve beer and wine sales in 2021, making Graham the final county to end its “dry” run in North Carolina.
How does ABC work?
The Alcoholic Beverage Control system is a monopoly. The ABC Commission oversees the purchase, transportation, manufacture, consumption and possession of liquor in North Carolina. Beer and wine are exempt, so they are widely available at bottle and wine shops, grocery stores, convenience stores, or even pharmacies.
The state ABC Commission is made up of a chair and two other members, all appointed by the governor. They oversee local ABC boards, which own or lease liquor stores. Local bars and restaurants must submit their requests for liquor to their local ABC board. The local boards then submit their orders directly to distilleries or suppliers, who drop the orders at the state’s ABC warehouse and deliver them to each store. Only suppliers who have an ABC permit in North Carolina can sell liquor here, and the state strictly controls the price of every bottle.
The general structure of ABC and its commission that was established in the early years after Prohibition remain in place via state law still today.
There are now 171 local ABC boards and 450 liquor stores in North Carolina, according to the ABC Commission. Last fiscal year, they sold nearly $1.9 billion worth of liquor.
Public or private?
A proposal to privatize the ABC system comes up in the legislature every few years. Most recently, state Sen. Jim Burgin, a Republican from Harnett County, filed a bill in April to end ABC Commission control over the state’s liquor stores over the next three years, and allow private liquor stores to apply for alcohol permits. Burgin’s bill does not have any co-sponsors and is not likely to advance this session.
The non-profit organization Carolina Champions for Growth simultaneously launched a privatization campaign called Free Our Spirits. They argue that the state’s ABC monopoly - and the lack of competition it creates - leads to artificially inflated liquor prices for businesses and consumers.
The non-profit describes itself as a leadership support group in its tax filings. Its website says the group’s mission is to create “a solid support infrastructure for veterans, women, and minority-owned businesses.” The campaign is also backed by hospitality groups representing businesses in North Carolina, who say they want easier and cheaper access.
North Carolina’s strict price controls on liquor are generally seen as either a significant drawback or benefit, depending on whether you support the current ABC system.
“It’s the same price everywhere you go. It’s better for the consumer,” state Rep. Ray Pickett, a Republican from Blowing Rock and co-chair of the House ABC Committee, told NC Local.
Pickett supports updating the state’s liquor laws, but he opposes the type of privatization Burgin’s bill would usher in.
“We've got plenty of [liquor] stores across the state, and I think privatization would just put one on every street corner, and I don't think that's what we want in North Carolina,” Pickett said.
How might the ABC system change?
The current debate in the legislature follows a pattern: An individual lawmaker or group pushes to privatize the system, and lawmakers respond by proposing incremental changes.
Pickett, for instance, is sponsoring a bill that would allow ABC stores to open on Sundays and let grocery stores sell ready-to-drink cocktails, or RTDs. These drinks – like High Noon or Cutwater cocktails – have small amounts of spirits, and often have total alcohol by volume similar to beer or wine. But because they contain liquor, state law currently says they must be sold at ABC stores.
The proposal would also allow bars and restaurants to run limited drink specials on a single business day, or “happy hour” pricing.
“We’re attempting to modernize our system without completely shutting the system down,” Pickett said. His bill advanced through the House Alcoholic Beverage Control committee this week. It must go through at least two more committees before it reaches the House floor.
Want to weigh in?
Does the current North Carolina ABC system protect consumers, or is it too rigid for the way people buy alcohol today? You can share your views by finding and contacting your legislator.
This article first appeared on NCLocal and is republished here under a Creative Commons Attribution-NonCommercial 4.0 International License.