By M.H. Cavanaugh
Christian Action League
March 20, 2015
RALEIGH – Dr. Mark Creech, executive director of the Christian Action League, said he warned that this year may prove to be a challenging legislative session for alcohol initiatives. “We’re seeing the good, the bad, and the ugly now,” he said.
Dr. Creech was referring to two alcohol measures filed this week in the North Carolina House and another bill introduced in both the House and Senate that the League had yet to report on.
“The good,” said Dr. Creech “is HB 290 – Prohibit Powdered Alcohol.” Powdered or crystalline distilled spirits is a powder that when mixed with water becomes an alcoholic beverage. HB 290 would prohibit the sale of powdered alcohol in the Tar Heel state.
Products such as “Palcohol” present a long list of safety and health concerns. Alcohol Justice, based in San Rafael, California, a highly respected alcohol industry watchdog, names the following:
- The cost is too low and thus will encourage over-consumption.
- It’s sold in packets, which creates easy access for youth.
- The size and the shape of the packets are similar to nonalcoholic children’s drink packets (i.e. juice squeeze containers).
- Creates the potential for combining with multiple packets to make a single drink more potent.
- Creates the potential for mixing of powdered alcohol with liquid alcohol.
- Creates the potential for mixing with energy drinks (i.e. caffeinated beverages).
- Creates the potential for mixing with youth-oriented alcopops (i.e. flavored malt beverages.
- It’s easy for underage drinkers to conceal.
- Creates the potential for ingestion by snorting, with toxic effects.
- Creates the potential for ingestion by eating, as one would sugar, with toxic effects.
The U.S. Alcohol & Tobacco Tax and Trade Bureau approved labels for the product last week – not quite a year after initially issuing, and then revoking approval in 2014. Four states have banned the product (Louisiana, South Carolina, Vermont, and Virginia). Fourteen additional states are considering bans and North Carolina would make 15.
Alaska enacted a ban on powdered alcohol as far back as 1980.
HB 290 has been referred to the House ABC Committee, and if the committee gives it a favorable report then it must be heard and passed by the House Health Committee.
“The bad,” said Dr. Creech “is HB 278 – Increase Small Brewery Limits.” HB 278 seeks to increase the amount of barrels a small brewery can sell, deliver, and ship before having to use a wholesale distributor to distribute its products. The current amount allowed is 25,000 barrels. HB 278 would increase the amount to 100,000 barrels.
After the repeal of prohibition, the 21st Amendment granted individual states the authority to regulate alcohol within their own borders. Although the federal government plays a role in alcohol regulation, it is the state-based system that is slated with the responsibility for orderly marketplaces that effectively regulate the production, distribution and sales of alcohol.
The system North Carolina adopted is made up of suppliers, distributors and retailers and called Three-Tier. It’s an arrangement that provides critical checks and balances to prevent and reduce the problems that preceded and led to Prohibition in 1920. Because of the independent buffer of a distributor between the supplier and the retailer, there are built in protections against corrupt, manipulative, or abusive industry practices, while also creating a level playing field for those in the alcohol enterprise.
“Efforts to raise the limit on barrels is an initiative that’s largely been driven by the Red Oak Brewery near Greensboro, as well as a few other breweries,” said Dr. Creech. “This has been going on since 2005. The current cap at 25,000 barrels is not a small amount of beer. It’s equivalent to 8.25 million bottles of beer. I think most people would agree that’s more than sufficient, even quite liberal, for these small breweries.”
Dr. Creech went on to argue 92% percent of breweries in this country produce less than 7,500 barrels annually. So the threshold of 25,000 barrels is tremendously high, he said.
“What I think this initiative is really about,” argued Dr. Creech “is undermining the Three-Tier system of alcohol regulation – a system requiring the highest levels of transparency and accountability. The system’s controls work for temperance and shield consumers from unsavory industry procedures. To whatever level you diminish Three-Tier you lose that clarity of the chain of custody that scrupulously traces the product from production to sale. You diminish the ability to protect against sales to minors and other abuses. You diminish the safeguards against contaminated or counterfeit products. You diminish the surety of an accurate means of collecting excise taxes. To whatever means the industry can get around the Three-Tier, you lose, the public loses, state and local communities lose, while the industry can laugh all the way to the bank.”
HB 278 has been referred to the House ABC Committee.
Dr. Creech also said, “The ugly is HB 178 – Spirituous Liquor Tastings/ABC Stores and its companion on the Senate side, SB 236.” These bills would allow three-hour-long liquor tastings events up to three times a week (between 1:00 p.m. and 7:00 p.m.) at ABC stores in locations where liquor-by-the-drink referendums have been approved. Customers at ABC stores would be allowed to drink up to a half-ounce of featured liquors and be given point-of-sale advertising materials.
Dr. Creech contended that ABC stores in North Carolina have always been about providing access to spirituous liquor wherever communities have approved ABC stores at the ballot box. The concept behind community ABC stores from their inception has been about regulation and control and never about the promotion of liquor or liquor sales.
“These bills, however, introduce a concept which has been historically avoided – partnership with the liquor industry in the pursuit of profits,” he said. “In the interest of encouraging temperance and protecting the public’s health from alcohol abuse, ABC stores have traditionally remained neutral.”
He argued liquor tastings create a paradigm shift concerning the philosophy and the role of ABC stores. “It’s not the proper role of an ABC store to make an alliance with the industry to promote sales or pursue profit. ABC stores can’t serve two masters. Either they are about regulation and control or they are like private liquor stores promoting and selling as much spirituous liquor as possible. You can’t be about both. Either we will ultimately hate one role and love the other, or we’ll be devoted to one role and end up despising the other,” he said.
Dr. Creech continued, “These bills are touted as a means of helping the ABC stores, but they really threaten to undermine their indispensable responsibility of regulation and control, putting the public at greater risk for negative outcomes of alcohol use and abuse.”
HB 178 has been assigned to the House Rules Committee and SB 236 has been assigned to the Senate Rules Committee.