The House ABC Committee met to hear a report from the Program Evaluation Division (PED) of the North Carolina General Assembly on Tuesday. Carol Shaw, delivered the report, which evaluated the effectiveness of the North Carolina Alcoholic Beverage Control system both to identify inefficiencies and improvement options. The report was the same one provided to the Joint Legislative Program Evaluation Oversight Committee during December of last year.
The study covered four areas in need of suggested change.
First, North Carolina’s ABC system has not kept pace with demographic and economic changes in the state. Shaw argued that liquor and fortified wine sales in the state generated $730 million in retail sales and $250 million in profits and taxes that went to state and local governments. She contended that if the state wanted to make more money selling alcohol it needed to make some changes.
One of the concerns she noted by the PED was that changing shopping patterns today affect a local ABC board’s profitability. Increased mobility causes people to shop in areas with a large concentration of stores and some counties were losing retail business to other counties. The report also noted that population growth in cities and towns makes the current threshold of 500 registered voters for holding municipal ABC elections too low, which results in unnecessary competition among boards and inefficient store operations.
Second, State statutes limit the ability of the North Carolina ABC Commission to effectively and efficiently manage the ABC system. Shaw contended the ABC Commission needs greater authority to enforce minimum standards for operations and profitability. She said the Commission should be able to assist local boards better in making changes, such as local board consolidation or mergers.
Third, unlike other control states, North Carolina has not clearly defined the mission of local boards in state statutes or administrative rules. The PED report contended that some local ABC boards use the lack of clear mission to justify ineffective and inefficient store operations.
Fourth, North Carolina also has a different system for regulating the sale of liquor. North Carolina is considered a control state. But Shaw argued that the state might want to consider whether other systems of alcohol sales identified in the PED report would be appropriate.
“Although I am not alarmed by the concerns sited in this report, there is one matter about it that is somewhat disconcerting,” said Rev. Mark Creech, executive director of the Christian Action League. “It is the emphasis on profitability. Granted, steps could be taken to make the ABC system more efficient. But this report is subtle in shifting our attention away from the primary objective of “control” to “profits.” To focus on “profits” in contrast to “control” would be a major shift in alcohol policy for the state of North Carolina. We should support any effort to help ABC better regulate the flow of spirits. But ABC is not in the liquor business. Its purpose is not to promote or encourage the sale of spirits. Traditionally, its mission has been to provide access to alcoholic beverages that communities approve by the ballot box. Making ABC more profitable, however, would be a clear departure from its authorization.
Shaw said that this year legislation would be forthcoming consistent with the PED’s recommendations.
At the close of the meeting, Rep. Ray Warren (D-Alexander) announced that two measures would be taken up for consideration at the next meeting, Tuesday, March 10.
Those measures are:
HB 249 – ABC Recycling Tax Credit is a bill granting a tax credit to ABC permittees who are required to recycle beverage containers. The legislation is sponsored by Rep. Pryor Gibson (D-Union).
HB 186 – Local Government Objections to ABC Stores A Proposed Committee Substitute (PCS) is expected to be introduced before the House ABC Committee on this measure. The legislation would simply allow more local government input regarding the location of an ABC store. It would provide local governments with authorization to object to the location of an ABC store by its local ABC Board provided that a hearing on the matter was held, evidence was taken, and a resolution on the matter passed. The objection to the store’s location would be made to the ABC Commission and the Commission would not rule on the location of the store in question for at least 45 days to allow the municipality to conduct a public hearing and to submit any comment or objection to the Commission. The state ABC Commission would make the final decision on the location of any store, and no appeal would be allowed to any court. The legislation is sponsored by Rep. Earline Parmon (D-Forsyth).