Opinion: Daily Journal

Defenders of state ABC system inadvertently show why it needs replacement

Walter Harris, chairman of the Chatham County Alcoholic Beverage Control board, told WUNC’s Frank Stasio he’s been told North Carolina is among the country’s best at selling hard liquor.

Taken without context, Harris may well be correct.

North Carolina controls every aspect of the statewide liquor market, including storage, distribution, and sales. The state, so far, has yet to open its own distillery, but it oversees all other aspects of the liquor trade in North Carolina.

Taken with context, that North Carolina sells liquor according to many rules enacted just after Prohibition and favors control over consumer choice and free market ideas, then what Harris told Stasio is complete nonsense.

Harris was among the panelists last week on Stasio’s “The State of Things” radio hour. The theme of the topical show was the state’s alcohol history and culture and the passage this year of legislation that will help the state’s craft distillers to survive and even thrive. Senate Bill 290, most of which became effective Sept. 1, aligns rules for N.C. craft distilleries more closely with those governing wine and craft beer. 

My colleagues at the John Locke Foundation, including people such as Becki Gray, Jon Guze, and Jon Sanders, have for years worked hard to fix the archaic way North Carolina governs alcohol. I’ve written about the subject myself, including a book specifically about the state’s craft distillers and its distilling history. I think it’s fair to say we’ve had more than a little influence in pushing the subject to the fore and in helping to shape legislation and reform liquor laws to the benefit of producers and consumers alike. 

The producers at “The State of Things” chose not to invite us to the show, but that’s their decision and one beyond our control. We can, however, speak to comments and some declarative statements from the broadcast, which, at the very least, are inaccurate and do little to move the issue forward. And, to avoid confusion, the issue is moving forward.

The real question is whether the N.C. Alcoholic Beverage Control Commission wants to lend its expertise in the transition or, rather, choose to tighten its grip on a system that’s splintering in its blistered hands.

Another guest on Stasio’s show talked about the history of North Carolina’s complicated liquor history, including the “bootleggers and Baptists” scenario, which encompasses the ideas of eliminating the competition and prohibiting alcohol altogether.

Rep. Jon Hardister, R-Guilford, who was on the show, will pick up in the General Assembly where a linchpin of ABC reform in North Carolina, Rep. Chuck McGrady, R-Henderson, left off. McGrady will retire next year.

House Bill 971, which McGrady sponsored, had stalled in the legislature, but McGrady managed a hearing for a proposed committee substitute in the House’s Alcoholic Beverage Control Committee in July. The Modern Licensure Model for Alcohol Control, originally filed April 25, basically clears a path for private liquor stores in North Carolina. H.B. 971 would eliminate the state-run alcohol warehouses in Raleigh and phase out the local ABC boards and stores.

Of course, the state’s politically entrenched ABC boards want to hear nothing of the sort. Harris, not surprisingly, talked about all of the money localities get from alcohol revenue. It’s the ABC’s primary argument against reform, and it’s really the only one that matters. N.C. craft distillers have their concerns, as well, chief among them is a fear of getting pushed out by the so-called “big boys.” Their concerns are valid, and lawmakers won’t dismiss them out of hand.

Hardister, though, rightly points out that government can regulate the private sector better than it can regulate itself. Enforcement, and, yes, control, will remain under the purview of the state ABC, and lawmakers, he said, will work to ensure those entitlements to local governments with ABC don’t go away.

“We want to make sure the local government is held harmless, as much as possible,” Hardister told Stasio.

Harris, and ABC boards around the state, won’t budge or compromise. With full sarcasm, Harris told Stasio, if it’s not broken, then fix it until it is.

But, Mr. Harris, broken it is. 

North Carolina is one of 17 control states but the only state with independent, local control over liquor. That’s 170 boards with that many opinions, misconceptions, and grudges. North  Carolina, Harris told Stasio, is 44th in the nation in consumption of liquor, but seventh-best in revenue collected from alcohol sales. That’s a dichotomy, yet proponents of control use it as a singular point of praise.

It’s now a clichè, but the debate here has little if anything to do with alcohol.

“It’s about jobs, it’s about business,” Hardister said.

It’s also about consumers and a free market. Yeah, it’s mostly about that. 

North Carolina is among a handful of states that prohibits liquor sales on Sunday. So, with Monday being Labor Day, state ABC stores were closed for two consecutive days, one of which is especially lucrative for alcohol sales. 

Here’s the thing: If it’s Sunday and I want a chicken sandwich, I know Chick-fil-A isn’t an option, as those stores will be closed. But I do have options. Many private businesses — Popeyes, Wendy’s, Bojangles’ — will sell me a chicken sandwich on a Sunday. Just not Chick-fil-A, and I’m fine with that. 

But, if I’m entertaining friends on a Sunday or other holiday and someone wants a drink of, say tequila, we’re just plain out of luck, unless someone wants to drive across the border. 

Apparently we’re incapable, according to certain state laws, of choosing for ourselves.

“I don’t think we ought to be in the business of babysitting our citizens,” Hardister told Harris and Stasio.

I couldn’t have said it better myself. If, that is, “The State of Things” would have given me — or one of my colleagues — the chance. Maybe next time.