By L.A. Williams
Christian Action League
June 17, 2016
RALIEGH – An alcohol provision that would allow North Carolina distilleries to deliver liquor to individuals outside of the state would not only undermine the state ABC system, but could also have serious public health and legal ramifications.
That’s the message the Rev. Mark Creech, executive director of the Christian Action League, is sharing with members of the N.C. House, which will soon decide whether or not to concur with the Senate-approved version of House Bill 169.
The bill would strike language in current ABC law that limits who distilleries can sell to and instead would allow them to “sell, deliver and ship spirituous liquor in closed containers at wholesale to exporters and local boards within the state, and to sell spirituous liquor in closed containers at wholesale or retail, subject to the laws of other jurisdictions, for delivery outside the state.” It would further declare that when the holder of a distillery permit sells liquor for delivery outside the state, the retail price shall be the distiller’s price.
While allowing a distillery to hawk its wares beyond the state borders may just seem like smart marketing, in fact it could put North Carolina in violation of the U.S. Supreme Court’s 2005 ruling in Granholm v. Heald. In that case, the High Court denied states the power to give their home-grown businesses a leg up by limiting the shipment of out-of-state alcohol coming in while authorizing direct shipment out by in-state producers.
Since state statutes do not permit distilleries outside of North Carolina to deliver liquor within Tar Heel borders, if H 169 becomes law, it could be successfully challenged on the basis of the Granholm ruling, and would likely lead to a court order allowing out-of-state distilleries to begin shipping liquor directly to residents inside North Carolina. That move, Creech says, would negatively affect tax revenues and ABC board profits.
“It would also fling open the door to mail order or internet sales and make it easier for minors to gain access to liquor,” he added. “That’s one reason that matters that involve our current ABC system are of fundamental import to the public’s health.”
Creech said that alcohol provisions like the one in H 169 “throw sand into the bearings of the well-run engine of North Carolina ABC.”
“I respectfully submit that they are offered without balance – giving considerable attention to the desires of the industry, without the proper understanding or deference to our long-time recognition that spirituous liquor is inherently more problematic than other forms of alcohol,” he added.
H 169 began in the House as a motor vehicles measure but became the Senate’s Regulatory Reduction Act dealing with everything from environmental policy to pet turtle sales. It initially included two alcohol provisions, one of which was killed in the Senate.
That provision would have allowed distilleries to sell more bottles of alcohol directly to tourists.
“Legislation was passed last year to allow distilleries to sale one commemorative bottle per customer annually,” explained Dr. Creech. “It became the first time in North Carolina history that spirituous liquor was allowed to be sold outside our control stores. Although limited, it represented, I suggest, a paradigm shift in our ABC system.”
He was not surprised by this year’s request that the number of bottles that can be sold annually be raised to one of each product sold by the distillery. North Carolina has 34 distilleries. Seven have one product, five have two, eight have three, five have four, five have five, two have six, one has eight, and one has 19.
“These add up, considering how many tourists the distilleries draw, and it would be more and more money going outside of the control system and not ending up with local municipalities who have to deal with aftermath of alcohol,” Creech said. “Further, this would be a betrayal of voters who authorized ABC boards to sell liquor, not distilleries.”
He was glad to see that provision pulled out of the bill and is hopeful the House will refuse to concur and put the brakes on out-of-state liquor sales.