By L.A. Williams, Correspondent
Christian Action League
RALEIGH — Fewer than six months into his role as Chairman of the Alcoholic Beverage Control Commission, Jon Williams is suggesting significant changes to the way liquor is sold in North Carolina — changes that would give the state more authority and could be a first step toward privatization.
His address to Gov. Bev Perdue’s Budget Reform and Accountability Commission (BRAC) Wednesday linked the origins of local control and ABC boards with the days of bootleggers and moonshiners and pointed out that illegal alcohol is now almost eliminated. He said the 410 local ABC liquor stores make up “just over 2 percent of the places where the public buys alcohol” while the state Commission oversees more than 25,000 permits including 17,000 retail alcohol outlets.
“It’s true that the role of local boards has changed over the years,” said the Rev. Mark Creech, executive director of the Christian Action League. “But we can’t overlook the importance of local people — the ones who vote whether or not to have liquor sales — having a say in how stores are operated and getting some revenue for their local law enforcement and rehab centers to deal with the fallout of those sales, alcohol abuse.”
Williams said small boards are “not where the sales are” and that to improve efficiency and help prevent cannibalization of markets, they should be consolidated to county-wide or even regional boards or merged into county governments. He said the ABC Commission should have the authority to enforce standards regarding salaries, profitability and product selection and that more training, including ethics training, for local boards is needed.
The options were in response to the governor’s call for “tighter state control, oversight and restrictions on ABC Boards if the system is to remain intact.” ABC has been under scrutiny since lawmakers ordered a study by the Program Evaluation Division in 2007, scrutiny that intensified after exorbitant salaries were reported in New Hanover County last fall and the Diageo Liquor Company violated ethics rules by wining and dining Mecklenburg ABC officials over the holidays.
Many of Williams’ proposed options mirrored those in the PED report, including the suggestion that the state be allowed to use agency stores in areas where profitability is low.
“Agency stores are not the direction we need to go if the purpose is increased oversight,” said the Rev. Mark Creech, executive director of the Christian Action League. “This would put liquor in the hands of a private store and would be the first step toward privatization. An agency store would have profit as its top priority and not control, which is the reason that ABC was created to begin with.”
In addition to outlining various options for increasing efficiency and accountability in the ABC system, Williams touched on the expectations of a valuation study ordered by ABC and the Governor to see how much the system is worth. He said the valuation would analyze trends and provide current value of the system for the next five and 10 years as well as identify “major value drivers” and recommend “possible transaction approaches to maximize benefit.” He cautioned that it would not address the allocation of potential proceeds to state and local governments or similar issues. Gov. Perdue has promised to also evaluate the “human costs” associated with a privatized system before making a recommendation.
The ABC system poured some $262 million into state and local government coffers last year without a penny from the state’s General Fund. The control system has kept consumption relatively low while revenue has been high. In fact, North Carolina ranks 48th in per capita consumption of spirits and sixth in revenue.
In addition to BRAC’s probe and the $175,000 valuation study, the ABC system is also the subject of a Legislative Joint Study Committee that met for the first time this week to review the PED report and start its own analysis. The committee will meet again March 24 and devote part of its meeting to hearing public comments.