By L.A. Williams, Correspondent
Christian Action League
RALEIGH — North Carolina’s Alcohol Beverage Control Boards — now focused on controlling the sale of spirits and serving the customers who voted in those sales — would have to turn their attention instead to the almighty dollar if proposed profitability standards become a reality.
“Jesus said no man could serve two masters. Very simply, when it comes to alcohol, a state is either about control or about profit,” said the Rev. Mark Creech, executive director of the Christian Action League. “Once you introduce that profit motive, then control can and will be diminished.”
The proposed profit margin, 5 percent — below which no board member gets paid and the board may be forced to merge with another, have its stores closed and/or its assets seized — is part of a bill draft being considered by the Joint Legislative Study Committee on ABC.
Presented to the group on Thursday as a starting point from which to craft legislation, the proposal would empower the state ABC Commission to set standards for store appearance, operating efficiency and customer service as well as mandate training for local board members, managers and employees. It also calls for raising the registered voter threshold for ABC store elections from 500 to 5,000 and would give the commission the authority to merge ABC boards to bring the number of boards from roughly 165 to 100, one per county.
“Many of the ideas on the table came from the Program Evaluation Division report issued in 2008, and several of them are good ideas,” said the Rev. Creech. “We support raising the voter threshold to 5,000 and required ethics training and were certainly thrilled to see that the draft did not call for privatization or for agency stores.”
“Our biggest concern is obviously the proposal to set profitability standards,” he added. “That requirement alone would reorder the priorities and put revenue above the safety and health of our citizens.”
Creech said local boards struggling to reach the profitability goal would have to shift from offering a service in a controlled environment to pushing a product, potentially leading to requests to advertise, extend hours, hold liquor tasting events or offer Sunday sales as ways to drive profits.
“Advertising, we know, has a tremendous effect on underage drinking and consumption levels, which is one reason North Carolina ABC Boards do not do it,” Creech said. “But if we start imposing a standard to be met, they would want some freedom to be able to do so.”
Using Rowan/Kannapolis ABC and its $9.2 million in liquor sales as an example, Rep. Edgar Starnes (R-Caldwell) pointed out another problem with setting a mandatory profit margin. Despite the high sales volume and resulting alcohol taxes flowing in to state coffers from Rowan/Kannapolis, the profit margin for that system was 3.97 percent at the end of last fiscal year. Under the proposed rules, it would be forced to merge, while a smaller system like Granite Falls, with roughly a tenth of the sales, would keep its board because its profit margin is 5.05 percent.
Rep. Pryor Gibson, vice chairman of the Legislature’s Alcohol Beverage Control Committee, voiced concerns over the idea of mandated mergers, reminding the committee more than once that ABC stores are the result of legally binding elections.
“If we are going to tell people they can have alcohol sales by voting it in with all the hoops they have to jump through and then turn around and change it, that’s not what this body is to be about,” said Gibson (D-Anson).
Study committee co-chairmen, Sen. Don Vaughan (D-Guilford) and Rep. Ray Warren (D-Alexander), emphasized repeatedly that the draft bill was simply a place to start and that committee members were urged to pore over it and come back with their own recommendations. Though the committee had already heard from some two dozen speakers at its last meeting, leaders opened the floor to about 20 more Thursday, including Bill Brooks of the North Carolina Family Policy Council.
“We recognize the economic and government interests in streamlining and efficiency in the system, however we would like to remind you that N.C.’s long history of Alcohol Beverage Control… has never had profit as its primary motivation but rather the regulation and control of a unique commodity which has the potential to contribute to both individual and societal harm,” Brooks said as he urged the committee to maintain “North Carolina’s unique, citizen oriented approach to alcohol sales.”
One of 18 control states, North Carolina is the only one in which locally appointed boards operate ABC stores.
As at the last meeting, one after another, substance abuse specialists, local ABC Board members and others from various walks of life urged the committee to address problems within individual ABC boards without endangering the proven success of the control system.
Near the meeting’s close, Rep. Starnes offered some of the best advice.
“We have an ABC system in North Carolina and the C stands for Control. … What we don’t have in North Carolina and I think what we don’t want is an ABP System, which is Alcohol Beverage Profits. I don’t think we need to be overly concerned about profits as much as control.”
The committee will meet next on April 22 and then again on May 5, both days at 2 p.m. It is among a number of organizations eyeing the state’s ABC system in the wake of complaints about soaring ABC salaries in New Hanover County and high-dollar Diageo dinners in Mecklenburg.