Virginia is a control state, but its model is friendly to that state’s distillers 

For North Carolina’s distillers, getting their products into ABC stores is arduous and time-consuming. 

Distillers must first check all the boxes pertinent to federal and state laws. The state must then approve their products before distillers send those products to Raleigh for distribution to ABC stores across the state.  

Which stores is up to distillers, but also largely up to the ABC boards — North Carolina has 168 — and their members, whom distillers must persuade to carry their brands.  

“It’s kinda up to you to convince each board administrator to put you in their store,” Donald Walton of Walton’s Distillery in Jacksonville said in an interview for my book Still & Barrel: Craft Spirits in the Old North State.  

Say, for the sake of argument, North Carolina reforms its state-run ABC system in favor of a model friendlier to the free market, to innovation, and to entrepreneurship. But let’s also take total privatization, which many North Carolina craft distillers don’t want, off the table. 

The state would do well do model itself after Virginia, says Scott Maitland. proprietor of Top of the Hill Distillery in Chapel Hill and a former president of the Distillers Association of North Carolina. 

Virginia is, like North Carolina, an alcohol control state, of which there are 17 in the United States. The Virginia ABC operates as an authority, though it still reports to the secretary of public safety. The governor appoints members to its board.  

The big difference, when comparing Virginia’s system to North Carolina’s, is the absence of local boards. 

“Virginia ABC made a decision back in the late ’90s to operate like a business, as close to a private-sector business as they could,” says Curtis Coleburn, who heads government relations for the Virginia Distillers Association. For more than 20 years, Coleburn served as chief operating officer of Virginia ABC. 

The Virginia ABC system, Coleburn says, has turned record profits for the past 20 years. 

“As a distiller, if you get your product listed with the ABC, then basically they can put it in all the stores anywhere in the state, if they want to,” he says. “In North Carolina, you not only have to sell it to the state, you have to get each individual ABC board to order it. It gives you a whole lot more sales calls to make.” 

Control states came to be, he says, in part because people see liquor as more intoxicating than beer and wine.  

“The state actually owns the product at some point in distribution, and when the state owns the product it can control the outlets and control what products are sold and how they’re sold. It’s a system that was designed to make it hard for spirits to operate.” 

For some people, too, drinking liquor conjured images of bartenders sliding full bottles of rotgut across smooth bars toward rugged Westerners, who would grab the whiskey with dirty hands, tilt back their heads, and take long, sloppy gulps. 

Virginia got its first distillery in 2006. North Carolina’s first distillery began producing liquor in 2005. 

Virginia, though, realized early on it would behoove the state to promote spirits, not only for tourism but to allow distillers to benefit from their efforts.  

Now in Virginia distillers can sell customers mixed drinks — up to three ounces per person. 

“With spirits, while a lot of people do drink it neat, most people who are consuming spirits, and especially people who are doing tours and that type of thing, like a cocktail,” Coleburn said. 

Distillers can also sell as much bottled liquor out of their distilleries as they wish. 

“We’ve never had a limit on what you can sell,” Coleburn says. “The limit really is on how much of the money the distiller gets to keep.” 

Virginia distillers operate their stores under the auspices of the ABC, which buys from distillers and pays them a commission on sales, now about half the cost of the bottle. The distillers association is working with lawmakers to increase what the distillers get back. 

“It is much like plowing new ground here in Virginia,” says Amy Ciarametaro, VDA executive director. “It’s all happening so fast. I don’t think there’s any ill will on the state’s part. I think it’s just that we’re figuring it out. It’s all so new. The state has a favorable listing process for Virginia distillers.” 

The ABC uses a checklist-type formula, with points based on various factors, when listing and evaluating new products. The same people use the same criteria to judge all products, though Virginia distillers are given a lower threshold when compared to large international brands.  

“To get delisted, it’s a specific dollar threshold,” Coleburn said. “We are expecting each item to contribute X dollars per year to remain on the shelves. … For Virginia products, that threshold is half what it is for non-Virginia products. They are helping our people stay.” 

“Our distilleries can have input, as far as if they want it to be regional, where they have a great marketing presence, or if they want to focus on major markets, etc.,” Ciarametaro says. “I think we’re very fortunate here in Virginia, where the state has their listening ears on and they’re reactive to the industry.” 

Objections to liquor based on religion are prominent in the N.C. General Assembly, as became evident as the so-called “brunch bill” wound its way toward approval last year. Any new moves to loosen the North Carolina system will get similar resistance. 

Not so in Virginia, Coleburn says. 

“Ninety-five percent of members of the legislature don’t vote like that at all,” Coleburn said. “I  can only think of maybe one or two senators and maybe three or four delegates who ever voice any kind of religious deal with respect to alcohol.” 

“They’re all for building business enterprises,” Ciarametaro said.