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Omnibus ABC Legislation Heard in Senate Commerce Committee, Section 4 of the Bill Allows for Retail Sales of Liquor Outside of ABC Stores

Please contact your state Senator about this legislation
By M.H. Cavanaugh
Christian Action League
May 22, 2015

ABC LegislationRALEIGH – Thursday, the Senate Commerce Committee rolled out an omnibus alcohol measure (HB 909 – ABC Omnibus Legislation) that makes a serious change to the state’s alcohol laws that would allow for the sale of spiritous liquor outside of the state’s ABC stores.

The proposed legislation contains language from four alcohol bills that passed the House before the crossover date, April 30th. The Senate took the four bills and rolled them into one, and then added language from companion bills that were never taken up for consideration by the House.

“The bills that previously passed the House and sent to the Senate were relatively innocuous,” said Dr. Mark Creech, executive director of the Christian Action League. “We didn’t take a position on any of them, except for the bill that banned powdered alcohol, which we supported. The others were just basically technical in nature and without much controversy,” he added.

But the omnibus bill was considerably controversial. Its original draft contained three provisions the Christian Action League opposed.

One section of the draft allowed liquor tasting events at community ABC stores. Another section allowed for distilleries to sell their spirituous liquor products at the distillery to persons who took a tour of their facilities. The third section allowed certain golf resorts to have a guest room liquor cabinet, even where the sale of mixed beverages has not been approved by an alcohol referendum.

When the final draft of the measure was presented to the Commerce Committee, the liquor tastings in ABC stores section was removed. Nevertheless, the sections allowing distilleries to sell their products on premises remained, as well as the golf resorts section.

Rev. Creech said a measure of this kind can be most difficult to address because lawmakers, as well as the public, tend to get lost in the bill’s many details. For that reason, he said, he focused his attention on that part remaining in the bill he believes is most dangerous – the section for distillery sales. He hopes lawmakers would consider that section more carefully and amend it so that there would be no exceptions to liquor being sold outside of North Carolina ABC stores.

Current law allows for distilleries to have samplings/tastings of their products on their premises, but because all spirituous liquor products must be sold from an ABC store, distilleries believe this places them at a business disadvantage. The proposed language in HB 909 allows distilleries to sell a commemorative bottle of liquor to one person, one bottle per year, after they have taken a tour of their establishment.

“One bottle is a significant change for us,” said Jon Carr, lobbyist for the North Carolina Association of ABC Boards, which is opposed to the change.

During public comment on the bill before the Senate Commerce Committee, Carr said if the bill becomes law, distilleries are likely to seek expanded sales authority. He also advocated voters in the state had never approved the sale of spirituous liquor anywhere except at ABC stores. He added distilleries are not experienced with retail sales of alcohol, arguing that a distillery is a different sales environment than a retail location that sells alcohol, and liquor is not the same as beer and wine.

During public comment Dr. Mark Creech also spoke before the Committee and urged Senate members not to approve the distilleries section of the omnibus legislation.

Dr. Creech told members of the committee that no matter the proposed amount of sale allowed by the distilleries, the change sets a dangerous precedent. He said if the bill passes it would be the first time in North Carolina history spirituous liquor would be sold outside of ABC stores. He argued distillery sales represented “a significant, even major, policy shift that will overtime undermine ABC’s positive controls and regulation of liquor.”

“I have been addressing alcohol policy in this state for 16 years,” said Dr. Creech. “I think I can say this with some authority. When one exception is made to our sensitive system of controls, always, inevitably it leads to another exception. You cannot give a right or a privilege specifically to one group and then withhold it from another.”

Dr. Creech argued North Carolina has the best system for controlling and regulating the sale of spirituous liquor in the country. But he said allowing for distillery sales would slowly undermine it. “The change,” he said may seem relatively innocuous, “but it’s like the chip in the windshield for your car. The crack will just spread.”

Patrick Ballentine, a former state senator and gubernatorial candidate who lobbies on behalf of distillers, also spoke during public comment and argued Rev. Creech’s remarks were over the top and “apocalyptic” in nature. He said distilleries were just “artisan entrepreneurs” that wanted to grow their business.

The Commerce Committee passed the proposed legislation on a voice vote. The measure now goes to the Senate Finance Committee for additional consideration. If it passes in Finance, it will then proceed to the Senate Floor.

Take Christian Action:

Contact your State Senator and ask him/her to oppose Section 4 – the distilleries section of HB 909 – ABC Omnibus Legislation. The Senate Finance Committee meets Tuesdays and Wednesday at 1:00pm.

If you don’t know who represents you in the State Senate, go to WRAL’s Find Your Lawmakers and type in your address.

Here are a few talking points that you can use when speaking with your State Senator:

  • Allowing distilleries to sell liquor sets a dangerous precedent. The sale of spirituous liquor in ABC stores is a strict control and regulation setting for protecting the public’s health from problems related to alcohol use and abuse. Once one group is allowed to sell spirituous liquor retail, then the group provided with that privilege is likely to press for additional privileges in law later, as well as other groups that will begin pressuring lawmakers for the same privilege. Though its proponents may argue they aren’t asking for much, the precedent set would be like a chip in the windshield, slowly spreading and undermining Alcoholic Beverage Control’s regulation, and resulting in additional sales of liquor outside of ABC stores. That’s not good alcohol policy.
  • Selling spirituous liquor outside of ABC stores is an affront to voters of alcohol elections. When people in North Carolina communities voted for the sale of spirituous liquor, they voted for it to be sold in an ABC store and not from a distillery. No community in North Carolina has ever approved the sale of spirituous liquor for any location other than an ABC store.
  • Selling spirituous liquor outside of an ABC store undermines “control.” Distilleries across the Tar Heel state are not experienced with retail sales of alcoholic beverages. Moreover, North Carolinians have traditionally held that liquor products are potentially more problematic than beer and wine. Therefore, spirituous liquor sales are confined to ABC stores. This form of “regulation and control” avoids any promotion of liquor sales, encourages temperance, and best protects the public’s health against abuses of liquor.