Should North Carolina be more like D.C.?
North Carolina should be more like our nation’s capital. No, not because of being a swamp filled with lobbyists, bureaucrats, and career politicians. But instead, in terms of how we indulge in and regulate alcohol. Our federalist style of governance in the U.S. allows states, and districts, to act as “laboratories of democracy”—a state can test a new policy. If it works, that policy can be implemented in other states. It’s long past time North Carolina noticed tried-and-true ways that alcohol can be reasonably regulated, such as how it is done in the District of Columbia. Doing so would be an easy and effective way to generate more revenue and increase individual liberty.
North Carolina does not need to take a cookie-cutter approach and simply copy and paste exactly what Washington D.C. is doing. However, there are a few pages from D.C.’s playbook that we in North Carolina could benefit from immediately.
First, happy hour specials. Happy hour specials are a viable way to increase sales and revenue during off-peak hours. On average, bars in D.C. with a happy hour program have seen a 26% increase in revenue during the designated hours. Also, check totals are, on average, $8 higher at a place with a happy hour during the specified hours than at sites without happy hour specials. The perk to increased sales is three-fold: more tips for employees, more revenue for the business, and more tax dollars for the General Fund. Currently, North Carolina law prohibits D.C.-style happy hours. If a bar or restaurant is to run an alcoholic beverage special, it must be for the entire hours of operation, not just from, say, 5 p.m. to 7 p.m.
A second way we can be more like D.C. is to extend the time alcohol can be sold. Legally, alcohol cannot be served past 2 a.m. in North Carolina and cannot start being served again until 7 a.m. Monday through Saturday and 10 a.m. on Sundays. I do not think that we need to sell alcohol all twenty-four hours of the day, like in Las Vegas, but allowing business owners to sell alcohol later—especially on weekends when the crowd of bargoers is at its biggest—would be a step in the right direction. Current D.C. law allows bars and restaurants to serve alcohol until 3 a.m. on the weekends and 4 a.m. if it is a holiday weekend if they so choose. If a crowd of people is willing to pay, why not stay open, serve them, and reap the monetary benefits? And as mentioned above, the perk to doing so is three-fold: more tips for employees, more revenue for the business, and more tax dollars for the General Fund.
Lastly, to align ourselves more with the nation’s capital, we should eliminate the Alcohol Beverage Control (ABC) Board’s monopoly over the procurement of distilled spirits. The U.S. has a lengthy history of coming down against monopolistic entities, and for good reason. An entity that enjoys a monopoly can, among other things, engage in anti-competitive behaviors and price gouging. The ABC Board does both: they have sole decision-making authority over who can sell their products in the state, and would-be vendors only have two chances per year to get their products on the shelves; from there, the ABC Board marks up the price of the distilled spirit—by as much as 75%—which gets passed on to the consumer.
In North Carolina, the ABC Board acts as a middleman: they buy from the supplier and store the product in their warehouse, and then the business chooses from what is in stock at the warehouse. In D.C., on the other hand, private entities known as distributors procure the product, and bars and restaurants go straight through them. If a bar, restaurant, or individual consumer doesn’t like a distributor’s prices or selection, they have a plethora of other distributors to choose from. Conversely, North Carolinians have only one option: the costly and inefficient ABC Board.
All in all, while there are plenty of ways we don’t want North Carolina to resemble the nation’s capital, there is one way in which North Carolina could benefit by being more like D.C.: a more relaxed approach to alcohol. By creating designated happy hour times, allowing bars and restaurants to serve alcoholic beverages past 2 a.m., and giving businesses and consumers more options when buying booze, we can increase revenue and liberty for North Carolinians.
Michael Bruce is an intern at the John Locke Foundation and has extensive experience as a bartender.