Proponents of our ABC system make so much of the commission’s power and propensity to “control” — rather than sell and market — spirits in North Carolina. Curbing alcohol consumption, keeping it out of the hands of minors, etc.
The arguments have been the same since 1937, and there’s little reason to think they might change.
But, to me, the report hints at another motive: Profit.
Well, profit and the continued proliferation of politics in what should be private enterprise, as opposed to a government monopoly.
In 2008, the state spirits warehouse took in about 5 million cases of liquor. By 2016, that number had increased to more than 6 million. No state ABC stores closed in 2018, but four new stores opened, bringing the number of ABC stores in North Carolina to about 435. Three counties or municipalities approved the sale of mixed beverages.
Obviously, there’s a demand for spirits, and the state has placed itself in charge of reaping the benefits. It hardly needs to try.
In the report, the ABC boasts: “The fiscal year 2018 marks the [ABC commission’s] third consecutive record setting year for 10-digit sales, where retail sales surged and sales to restaurants and other businesses with mixed beverage permits increased over the prior year. The billion-dollar ABC revenue resulted in an all-time high transfer of money into the General Fund for use by the N.C. General Assembly.”
From there the money was distributed to some 50 state entities, including colleges in the UNC System and departments of government, including the state auditor, which, in August found that poor contract administration cost North Carolina taxpayers at least $11.3 million over 13 years. Unused warehouse space potentially cost the state $2.1 million over seven years, and a lack of monitoring left the state underpaid by at least $297,537 over two years.
Our ABC system should be privatized, at least to some degree. But the state isn’t about to even relax its hold on this golden bottle, despite some small efforts to make it easier for our state’s distilleries to profit and thrive.
Millions of dollars are distributed each year to city and county governments, to use at their respective discretion. Pair that revenue with the 168 local — and inherently political — ABC boards and you have an entrenched, monolithic system that buys loyalty while wielding the hammer of control.
An entire page of the report is dedicated to education outreach, espousing programs to reduce underage drinking, compliance, and responsible sales, which is key. The liquor business is expanding and growing as never before. Consumers have more choices than ever, and connoisseurs relish the hunt for the proverbial liquid “unicorns.” In North Carolina, that’s a never-ending quest.
Yet for distillers trying to operate in this state — honest, dedicated business people just trying to follow the rules and make a buck — arcane laws consistently strangle innovation and efforts to prosper.
For North Carolina government, however, regulating, storing, distributing, and selling alcohol is big business.
And business is booming.