Rev. Mark Creech, Executive Director
John deRosset, Administrative Assistant
Analysis of HB 536: ABC Omnibus
Regulatory Reform (SB 592)
House Bill 536: ABC Omnibus Regulatory Reform (SB 592) is a legislative initiative with sweeping reforms that unravel North Carolina’s alcohol policies.
It is unprecedented, with 16 pages and 25 provisions, 12 of which will negatively impact public health and safety, according to the scientific evidence.
This is not the cry of Chicken Little. One needs only to read this analysis with an open mind and an appeal to common sense to discover the disturbing nature of this legislation.
It is not hyperbole to say that if this bill passes as written, more people will die or be disabled and maimed, more marriages will fail, more children will be neglected or injured emotionally, addictions to alcohol will increase, and many others will be impoverished in ways untold.
The policies outlined in the measure will surely and significantly exacerbate alcohol-related harms.
This bill will unquestionably add to the social costs of $7 billion annually that North Carolina already pays because of alcohol abuse. Whatever money or economic expansion is promised for adopting these proposals will be offset, even totally eclipsed by the social costs.
Many stakeholders with interests in the alcohol industry were invited to consult with lawmakers in crafting this legislation. Ten or more of these stakeholders were represented at the House ABC Committee’s hearing of the bill. Many of them spoke in support of the provisions written for the group or organization that they represented. But there was one glaring omission evident in the bill’s development. No one from the public health community had been asked to weigh in or advise. Not one!
Furthermore, although experts in the field of alcohol research and public health and safety were present for the House ABC Committee’s meeting, because of the bill’s size, with its multiple dangerous provisions, it was impossible for them to address the legislation’s content at that time effectively.
However, Diane Riibe, a North Carolina resident and the former executive director of the U.S. Alcohol Policy Alliance and a 25-year veteran of alcohol policy work, did speak before the committee and summed up her assessment. Riibe said that in the quarter-century of alcohol policy work she had done, she had never seen a state “take on this level of pulverization of the current system.” She urged lawmakers to clear their heads long enough to “consider whether or not they want to hear the public health impact and hear from those who know.”
“It is as though every single provision looked at what the science was and said, ‘we’ll do differently than that,’” Riibe said. “The result will be very clear, make no mistake about it.”
The Christian Action League implores you to consider the following analysis of HB 536 (SB 592).
Admittedly, the analysis is long, but the purposes behind certain alcohol policies are often unknown and difficult to understand. Consequently, current regulations are often categorized as “crazy” by the uninformed and wrongly smeared as a remnant of Prohibition-era attitudes and antiquated laws which desperately need modernizing.
Nevertheless, North Carolina’s current alcohol laws are as relevant as ever, especially in a time when alcohol-related problems are growing. The ramifications of deregulation shouldn’t be underestimated.
So it takes more than a soundbite or a few sentences to sufficiently explain why certain policies ought not to be abandoned and supplemented with more liberalized ones.
I submit this analysis of the bill’s objectionable provisions and earnestly pray that you will consider each one before voting affirmatively on any or the overall bill.
A number of the bill’s provisions have been introduced in the past but did not succeed. Now they are all rolled into one bill with the hope that the deluge of information they present might overwhelm you and lead to simply trusting in the arguments of proponents. That would not be wise.
I earnestly pray that you will see that this measure is not worthy of your support. It will have a deleterious effect on the citizens of our great state.
-Rev. Mark Creech, Executive Director, Christian Action League
Analysis of the Bill’s Objectionable Parts
Part 5 – Would allow for the sale of beer and wine stadium-wide at collegiate sporting events.
Tailgating already provides tremendous amounts of alcohol at collegiate sporting events. This measure adds the dynamic of alcohol sales within the stadium.
Proponents site data that they claim proves that when stadium-wide alcohol sales are allowed, alcohol-related offenses drop. This data, however, is not reliable for crafting a public policy as momentous as allowing for greater access to alcohol on college campuses.
The data provided by proponents is not the result of “scientific evaluation” or “peer-reviewed” studies. Instead, the declines in alcohol-related offenses cited by proponents are more likely the result of factors such as a greater police presence on game days, and not because the college or university chose to sell alcohol at collegiate sporting events.
Nonetheless, there is very reliable evidence which unequivocally concludes that making alcohol more available, among a population that already drinks heavily and a substantial portion of which is already in need of some clinical intervention around their drinking, will exacerbate rather than alleviate excessive drinking and related harms.
(It should also be noted that this provision is in a stand-alone bill, HB 389 – ABC/Univ Athletic Facility, which has passed the House and now resides in the Senate Rules Committee.)
Best Server Practices
If the North Carolina General Assembly decides to move ahead with this proposal, the Christian Action League has encouraged the bill’s sponsors to include best server practices as a part of the measure’s language.
This is not something that should be left to the schools themselves, but something stipulated and required by the legislation. Otherwise, this would be like allowing the fox to guard the henhouse.
One study by the National Institutes of Health, Alcohol Control Policies and Practices at Professional Sports Stadiums has determined that the following are the best practices for serving alcohol stadium-wide at sporting events. They are summarized as follows:
- Require servers and managers to attend alcohol training, and include alcohol policy development in manager training.
- Hold staff meetings at least monthly, and include discussion of serving policies, ID checking, refusal of service to underage persons, and denying service to intoxicated persons.
- Require ID checks for all persons appearing age 30 and under.
- Have a manager on duty in alcohol-selling booths at all times.
- Prohibit staff under age 21 from selling alcohol, both in seating areas and booths.
- Designate alcohol-free family sections in the stadium.
- Limit the size of drinks to 12 ounces but no more than 24 ounces.
- Limit sales of beverages to two per customer.
- Provide distinguishable cups for alcohol.
- Prohibit intoxicated persons from entering the stadium.
- Prohibit leaving and re-entering the stadium during the game.
- End sales well before the end of the game (5 minutes after the start of the third quarter; baseball at the end of the sixth inning)
- Develop an in-stadium system that fans may use to text security personnel when any negative alcohol-related incidents occur.
Part 6 – Would allow for the sale of beer and wine on the passenger-only ferry traveling from Hatteras to Ocracoke.
This provision would allow a state agency to sell alcohol for the first time in North Carolina history. This sets a dangerous precedent that should not be allowed.
It might be countered that ABC is an agency of the state that sells liquor. This is a common misconception and a myth. The state’s Alcoholic Beverage Control Commission is a regulatory agency of the state that enforces the alcohol laws and rules, but it does not sell liquor. The sole authority for selling liquor in a community belongs to the local ABC Boards. The ABC stores belong to the local Boards. Therefore, no state agency in North Carolina sells liquor.
This provision would allow the Department of Transportation (DOT) to be the first state agency to sell alcohol.
This provision could also provide a hazard for passengers when an individual or group has had too much to drink. Law enforcement is not readily accessible on the water.
Moreover, if an unfortunate alcohol-related incident occurs, who is responsible? Surely the provision would challenge the state’s dram shop laws.
Part 7 – Would allow for a new statutory category of “Bars” for alcohol permittees.
The primary purpose of these establishments, “Bars,” is selling alcohol on their premises. The bar would be required to have gross receipts from alcoholic beverages for consumption on the premises of not less than 75%.
These establishments would not be subject to the health code regulations governing the sanitation of establishments that prepare or serve food for pay.
Current law in North Carolina does not allow for bars. To sell mixed beverages, permittees must also qualify as a restaurant, and the criteria for qualifying as a restaurant requires a grill and seating for a minimum of 36 people.
Restaurants that sell alcohol are also required to meet the 70/30 alcohol to food ratio (A ratio that was once as high as 50/50 but lowered to 70/30 in recent years). Gross receipts for alcohol can be as high as 70%, and the gross receipts for food must be as high as 30%.
The policy of requiring that establishments must qualify as a restaurant to secure a mixed beverages permit has worked well in North Carolina to foster the more respectable-type establishments that sell alcohol and not just bars.
Positively working in tandem with this has been the requirements of the alcohol to food ratio. It has been a well-established fact for many years that drinking on an empty stomach results in the alcohol being absorbed more quickly into one’s system. Eating food while drinking helps absorb the alcohol and slow it’s processing into the bloodstream down, assisting one to avoid rapid intoxication. Restaurants encourage and facilitate this kind of behavior when bars do not.
This provision would inevitably result in the type of establishments North Carolina has traditionally rejected. No community ever voted for a “Bar” as defined in this proposal, when they voted for a mixed beverages referendum. When voting for mixed beverages, it was clear to the electorate that they were voting for sales at restaurants, hotels, private clubs, convention centers, and community theaters, as well as some nonprofit and political organizations. A “Bar” was never a part of the equation, and this provision, if passed, “pulls one over on the people.”
Providing a new statutory category of “Bars” will unquestionably create the opportunity for increasing alcohol outlet density. Alcohol outlet density has been cited by the literature as a major culprit for increasing underage drinking, violence, and crime. If this provision passes, there would be a need for additional Alcohol Law Enforcement to help monitor and ensure compliance, something this bill does not address or provide.
North Carolina does not need bars dotting every corner of every town and out in the rural areas in counties where the sale of mixed beverages have been approved. This state is not like other states with regard to this practice, and public health and safety, as well as the state’s more wholesome culture, are better off for it.
Part 8 – Would allow distilleries to sell, deliver, and ship their products out of state directly to establishments and residences.
The Christian Action League has always opposed the direct shipment of alcohol to individuals. Allowing the shipment of spirits to a consumer’s home, opens the potential for underage purchases, which is a serious problem today?
“The June 2015 Report to Congress on the Prevention and Reduction of Underage Drinking” addressed state laws that prohibit or permit retailers to ship alcohol directly to the consumers located across state lines, usually by ordering alcohol over the internet.
The report noted:
“Retailer interstate shipments may be an important source of alcohol for underage drinkers. In a North Carolina study (Williams & Ribisl, 2012), a group of 8 18- to 20-year-old research assistants placed 100 orders for alcoholic beverages using internet sites hosted by out-of-state retailers. Forty-five percent of the orders were successfully completed…
“Most vendors (59 percent) used weak, if any, age verification at the point of order, and, of the 45 successful orders, 23 (51 percent) had no age verification at all. Age verification at delivery was also inconsistently applied.
“The North Carolina study reported that there are more than 5,000 internet alcohol retailers and that the retailers make conflicting claims regarding the legality of shipping alcohol across state lines to consumers. For example, one internet alcohol retailer said on its website that only four states (Massachusetts, Nevada, Texas, and West Virginia) do not allow internet alcohol retailers to ship directly to individual consumers. Other internet alcohol retailers list different states or imply that all shipments are legal.
“There were also conflicting claims regarding the role of common carriers. The North Carolina study reported that all deliveries were made by such companies, and many internet alcohol retailers list well-known common carriers on their websites. Yet carriers contacted by the North Carolina researchers stated that they do not deliver packages of alcohol except with direct shipping permits. This suggests confusion regarding state laws addressing interstate retail shipments. North Carolina, where the study took place, prohibits such shipments, which means that at least 43 percent of the retailers in the study appeared to have violated the state law.”
(Retailer Interstate Shipments of Alcohol, a policy summary excerpted from the June 2015 Report to Congress on the Prevention and Reduction of Underage Drinking, provided by StopAlcoholAbuse.gov.)
Part 9 – Would remove current restrictions on the number of bottles a distillery may sell of its product at the distillery for off-premises consumption to unlimited sales.
Proponents of this provision argue that what distillers want is parity with beer and wine – the same privileges of the breweries and wineries in North Carolina. However, North Carolina has never believed, nor should it ever concede, that liquor is by nature equal with beer and wine. It is not, and, therefore, the rules should not be applied in the same way. Allowing distilleries to sell unlimited bottles of spirits at the distillery rather than requiring them to be sold in local ABC stores concedes this very important principle. To undermine this principle is to diminish the foundation upon which the whole ABC system for liquor sales stands.
The sale of bottled spirits in this state has rightly been reserved to local Alcoholic Beverage Control stores because spirits are considerably more problematic by nature. In terms of Alcohol by Volume (ABV), spirits are typically much stronger than beer and wine. Standard spirits are about 35-40% ABV, and some even higher. Beer and wine are much lower.
North Carolina has always wisely kept a tight leash on bottled spirits and for a good reason. It takes considerably less vodka, rum, or whiskey to get dangerously inebriated than from beer or wine. Moreover, purchasing and drinking spirits by the bottle is a much cheaper form of drinking than purchasing the more expensive mixed beverages. And generally speaking, the bottle lends to drinking more in one sitting and for less costs, making its form of imbibing more hazardous and disposed to overconsumption.
Although North Carolina ABC stores have been known to sell alcoholic beverages to underage drinkers, this is not common because the stores are not driven by profit as a retailer.
If a group of underage drinkers was to get their hands on a bottle of spirits, in comparison to beer and wine, within one session of sharing that bottle, they would drink the equivalent of 22 glasses of full-strength beer, more than 2 liters of red wine, or more than three bottles of champagne. Underage drinking is another critical reason for resisting proposals that undermine the state’s current ABC system for the sale of spirits.
Distillers are currently allowed to sell as many as five bottles of their product to each customer annually. Few people will ever purchase more than five bottles at any one time. However, to allow distillers to sell unlimited bottles at the distillery is to allow them not only parity with breweries and wineries, a status they should not have, but in principle, it allows them parity with a local ABC store. Giving liquor equal status to beer and wine and a distillery equal status with a local ABC store will overtime seriously undermine the philosophy and function of North Carolina’s ABC system for liquor sales.
This is not inconsequential!
Part 10 – Would require the ABC Commission to modify the rule on deeper discounts for beer or wine by membership card or coupon from 25% to 35%.
Numerous are the studies which have concluded that any time appealing advertising is teamed with offering a discount on alcohol sales, consumption levels dangerously rise. Not only should there be concern about the way this legislation would put people with addiction problems at risk, but there should also be concern about its potential for exacerbating the problems of underage drinking and college binge drinking rates.
The North Carolina ABC Commission rejected this request via petition by the North Carolina Retail Merchants Association in 2006. At that time, the Commission received correspondence from some of the most respected names in public health and alcohol policy.
Those names included: Kim Miller, Manager of Federal Relations and head of the alcohol policies project of the Center for Science in the Public Interest in Washington D.C.; Dan Ireland, Executive Director of the American Council on Alcohol Problems in Birmingham, Alabama; Cynthia Moreno Tuohy, Executive Director of the National Association of Alcohol Drug Addiction Counselors in Alexandria. Virginia; Dr. John C. Nelson, who up until 2006 was the President of the American Medical Association; Henry Wechsler, Director of the College Alcohol Study of the Harvard School of Public Health; Barbara Alvarez Martin, a former member of the 2005 North Carolina Governor’s Task Force on Driving While Impaired, and also formerly director of the NC Initiative to Reduce Underage Drinking; Dr. Philip Cook, a renowned economist and a Terry Sanford Professor of Public Policy at Duke University; and Darrell Jernigan, Director of the Governor’s Highway Safety Program – all vigorously opposed this proposal.
Even former First Lady, Mary Easley, who was at that time, the national co-chair for the Leadership to Keep Children Alcohol Free weighed in on the matter.
She wrote: “Many retailers argue that, if clerks are following the law consumers who are under the legal drinking age will not benefit from these discounts. This is not true. Seventy percent of youth report obtaining alcohol from a person they know who is over 21 and who would use these discounts. Public health advocates agree that a decrease in alcohol price will affect alcohol availability to minors and compound the many challenges facing law enforcement, educators, counselors and state and local leaders who are working tirelessly to reduce and prevent underage drinking in our communities…Alcohol is already currently available at almost every turn at the grocery, convenience, or drug store aisle and consumers can easily find a six-pack of beer or bottle of wine priced lower than some brands of sodas or bottled water. In addition, alcohol advertising has saturated our society to the point where our children can name more brands of beer than they can American presidents. Why do we need to give consumers one more incentive to purchase a product associated with so many risk and harmful consequences?”
The arguments made against deeper discount practices of alcoholic beverages are as pertinent today as ever. North Carolina’s problems with underage drinking are still severe.
Part 12 – Would allow the sale of up to four alcoholic beverages at one sitting to a patron, except at a stadium, athletic facility, or arena on the campus or property of a public college or university; or during a sports event sponsored by a public college or university.
The current law allowing for only one drink may cause some to declare it “ridiculous,” and for others, it may cause some inconvenience. Nevertheless, it is a good law that protects everyone.
This is an era of heightened awareness about the perils of drinking and driving. Not all people who drink reach the BAC limit of 0.08% in the same manner as others. Many factors can affect the BAC which can make it very difficult for a proprietor to judge whether someone has technically reached their limit. Some may reach the BAC limit with fewer drinks than others. It should also be noted that intoxication begins with the first drink.
The law as it stands today provides a safe-stop measure that helps servers make sure that they are not serving someone underage or someone who is not sober. Part 12 of this legislation makes that objective, as well as the legal duty of a permittee, much more difficult.
Not only does alcohol affect people differently but all drinks are not created equal. Wine and beer vary in their concentrations of alcohol. The ABV of a mixed beverage may also significantly vary depending on the person mixing it. When one adds inebriated judgment to the mix, it can be a recipe for ruin. The one-drink rule makes matters easier for the patron and proprietor to track.
Repealing the one drink rule and allowing for the sale of up to four drinks per sitting encourages overconsumption and will place both patrons and proprietors in compromised situations.
Part 15 – Would allow ABC stores to open on Sundays from 12:00-5:00, if authorized by the county or city where the local board is located.
The current ban on Sunday sales serves a secular purpose, one supported by scientific research which demonstrates that increasing days of sale by allowing previously banned alcohol sales on either Saturdays or Sundays exacerbate the problems of excessive alcohol consumption, mostly impacting problematic drinkers, and consequently driving up motor vehicle crashes, incidents of DUI, police interventions, and in many cases assaults and domestic disturbances.
These alcohol-related harms would only add to the annual $7 billion tabs in social costs that all North Carolinians, even those who do not drink, have to pay. It’s only right that the state promote and preserve those policies which keep social costs at a minimum. The current policy of closed ABC stores on Sundays serves this secular purpose quite well.
Moreover, the “Brunch Bill” is less than two years old. There has not been sufficient time to study how the legalization of alcohol sales starting two hours earlier on Sundays is impacting the state’s public health and safety. It would be prudent to wait to determine this before rushing to also allow for liquor stores to open on Sundays.
Second, the current ban serves a religious purpose because it is friendly to churches. No one wants the state to legislate observance of the Sabbath Day or as Christians often call it, The Lord’s Day. Nevertheless, it is true that research shows in studies such as, The Church v. the Mall, that whenever a state repeals its blue laws, religious attendance falls, and church donations and spending fall too.
Please note that churches provide programs of charity to the impoverished, the needy and the emotionally broken, more than any group, and to do something which works against them is to harm all of their charitable causes inadvertently.
Religion, more specifically, the Christian religion also plays a central role in developing and sustaining the character of a citizenry that is morally fit to maintain a culture of self-restraint, justice, courage, and compassion. Just as lawmakers are sensitive about avoiding public policies that diminish an environment conducive to strong business, churches need an equal sensitivity to their pursuits, which help so many and work to strengthen character and virtue.
It is exceedingly shortsighted for lawmakers to ignore the positive and indispensable contribution that churches make to the culture by complicating or frustrating their means of providing it. Liquor is a luxury of life and not a necessity. Religion is not a luxury but a necessity to human flourishing. Reasons given for Sunday sales of liquor pale in comparison to the need of churches not being unnecessarily encumbered in effecting their necessary objectives. This is especially the case, when the current law already provides ample access to liquor sales for both retail consumers and mixed beverages permittees, Monday through Saturday.
Part 16 – Would allow liquor tasting events in ABC stores.
The Christian Action League has always opposed liquor tastings at ABC stores. This position is not based on concerns that the small samplings of liquor tasted would present a danger for intoxication and its unfortunate consequences. The League’s position has always been a philosophically-based argument that is worthy of support.
In 2005, when the General Assembly was debating the merits of whether to adopt a state-operated lottery, one of the arguments erroneously made in favor of enacting a state-operated lottery was that the state was already in the liquor business. The League argued then, as it does today, with a sense of pride – North Carolina has never been in the liquor business. ABC has traditionally been about control – regulating the sale of a product that is not an ordinary commodity and presents a considerable health risk.
Characteristically, ABC stores have never been about promoting the sale of liquor. ABC stores and their local Boards have rightly kept to a position of neutrality and avoided appearances of endorsements or encouragements to drink. The purpose of ABC stores has only been to provide accessibility to liquor through a highly regulated form of liquor sales – something the electorate authorized at the ballot box.
This provision, however, crosses a line. It changes the core objective of an ABC store from the neutral stance of providing accessibility to liquor to an alliance between the ABC stores and the alcohol industry in the promotion and sale of liquor.
It is the principle of the matter that should concern everyone who wants to preserve the ABC system from shifting its focus from “control” to one concentrated on “profit.” Liquor tastings reflect a major paradigm shift in philosophy from a position of neutrality to one of active participation with the spirits industry.
At the repeal of Prohibition, when systems like North Carolina’s were being adopted, John D. Rockefeller, Jr. warned:
“Only as the profit motive is eliminated is there any hope of controlling the liquor traffic in the interest of a decent society. To approach the problem from any other angle is only to tinker with it and ensure failure.”
The truth remains constant for every generation.
The League was gravely disappointed that the North Carolina Association of ABC Boards changed their position of “neutral” on in-store liquor tastings to one of “support.” The League believes this is a grievous error that will slowly eat like cancer into the purpose for their existence.
Part 19 – Would authorize a common area entertainment permit for common areas in multi-tenant establishments, which would allow customers to exit a permiteed premises with an open container and consume the alcohol in the common area of a multi-tenant establishment.
North Carolina is a state where respect for others is a core virtue. In a spirit of respect, the state has reasonably sought to shield from public-view the drinking of alcoholic beverages, except in those places where people know to expect it. It should come as no surprise that many people in the state do not approve of drinking, nor do they want themselves or their children exposed to it any more than cultural norms necessitate. There are places that families typically frequent where they do not expect to find the drinking of beer, wine, and liquor in the public view.
Multi-tenant establishments, establishments located in places such as the Mall, as well as many others, would eliminate the number of places that families, especially scrupulous parents with their children, feel comfortable going together.
Alcohol advertising is almost everywhere today on billboards, television, radio, and signage. There is hardly a place anyone can go that people aren’t confronted with alcohol sales in some way. Nevertheless, there should still be some locations where families can go that they may be relatively assured they will not have to see or confront alcohol use or abuse.
Part 20 – Would create a delivery service permit that would allow a permit holder’s employee or independent contractor to deliver malt beverages, unfortified wine, or fortified wine on behalf of a retailer to an individual purchaser.
Although this section of the bill has requirements for training, handling of funds, age verification, and packaging, delivering alcohol to residences is fraught with too many variables for mischief. Unlike other scenarios of when alcohol is provided, it is a more private setting and not in the public eye. Therefore, the deliverer is more able to hide his or her wrongful delivery practices with smaller chances of discovery.
Drinking at home after a hard workday is not uncommon for some, but for those who are most vulnerable to alcoholism, home deliveries facilitate negative opportunities for abuse. Some people drink alone at home in an attempt to hide their drinking problem from their friends. Adult alcoholics often admit that they first started consuming alcohol at home when no one else was around.
Much of the research on underage drinking shows that teens often drink in solitude, and their success in being able to get alcohol despite checks to prevent it is phenomenal.
Again, home deliveries of alcohol provide too much room for mischief and the abuses of alcohol.
Also, see Part 8.
Part 21 – Would allow breweries to sell the malt beverages owned by the brewery for on- or off-premises consumption, regardless of the results of any malt beverage election.
This provision is terribly egregious because it is an assault on the state’s election process. It would have the effect of overturning the will of the people in places that voted down the sale of malt beverages.
Breweries that have located their establishments in places where the sale of malt beverages was not approved, either already knew the rules when starting their business, or surely should have known. Either way, the stated will of the electorate should never have to take a back seat to the objectives of a brewery. Overturning the results of an alcohol election to serve the purposes of a brewery is an insult and affront to the rights of the people to choose their destiny concerning alcohol sales.
Such special rights should have never been given to wineries in the state. One injustice shouldn’t be the premise for allowing an additional injustice.
Breweries say they want parity with the wineries, but providing them the parity they seek would be an injustice to the communities who declined by the ballot box to allow for beer sales.
This provision would be an act of sacrilege to the sacred right of voting.
Please Vote “NO” on HB 536:ABC Omnibus
Regulatory Reform (SB 592)