Christian Action League
The Joint Legislative Program Evaluation Oversight Committee heard a report from the Program Evaluation Division (PED) of the North Carolina General Assembly on Wednesday. The report evaluated the effectiveness of North Carolina’s Alcoholic Beverage Commission system both to identify inefficiencies and improvement options.
According to a summary statement provided by the PED, the study “examined how North Carolina’s ABC system functions, focusing on the operation of the 158 local boards.”
The study reported on four essential findings:
- North Carolina’s ABC system has not kept pace with demographic and economic changes in the state.
- State statutes limit the ability of the North Carolina ABC Commission to effectively and efficiently manage the ABC system.
- Unlike other control states, North Carolina has not clearly defined the mission of local boards in state statutes or administrative rules.
- North Carolina has a different system for regulating the sale of liquor than many other states.
Carol Shaw, who delivered the report on behalf of the PED, noted that North Carolina is one of 18 states nationwide with a control ABC system and the system was in need of modernizing. She argued 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. “Selling liquor is important to North Carolina’s economy,” she said, and if the state wants to make more money selling liquor it should make some changes.
Michael Herring, an ABC Commission administrator acknowledged that some changes of modernization suggested by the evaluation team were needed, but overall the PED study proved the current system of control was working well.
One of the findings noted by the PED project was that changing shopping patterns today affect local board 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.
Senator Charlie Albertson (D-Duplin), a member of the Oversight Committee also argued that such disparities of equal distribution exist within counties where cities had approved alcohol referendums, but had not approved the same in the county. He contended this often places businesses in the rural areas at a competitive disadvantage. Albertson suggested there ought to be some mechanism in the law that when a county reaches a certain threshold of approved alcohol sales, then the whole county would automatically become wet.
“I think what Albertson argues for would be misguided,” said Rev. Mark Creech, executive director of the Christian Action League. “Yes, there are disparities. But those disparities are not necessarily a bad thing. They may be bad from a business person’s perspective, but not a control perspective. Such disparities actually serve to protect the public’s health. Alcohol is no ordinary commodity and making it a tad less accessible by limiting its outlets reduces alcohol related problems. This is proven by nearly all the best studies that address the problems associated with alcohol abuse.”
Shaw also said the mission of the local ABC boards was unclear in statutes and rules and the ABC Commission had no authority to enforce minimum standards for operations and profitability. She argued some boards use the lack of a clear mission to justify ineffective and inefficient store operations by deemphasizing profitability.
But Creech said that “control is what ABC is supposed to be about – hence the word ‘Control’ is a part of their name.” He added some of the PED’s recommendations for modernization – like raising the threshold for an ABC store election from 500 registered voters to 5000 – might prove to be helpful with control. “It was a relief to hear the PED didn’t recommend the privatization of liquor sales, as we had feared”, he said. “Nevertheless, it was troubling to hear Shaw suggest the state might want to explore the use of ‘agency’ stores in places where ABC stores had failed or didn’t bring a profit. That would allow a place like the local ‘Piggly Wiggly’ to sell liquor and create a ‘camel’s nose in the tent’ toward privatization. I think it would also result in new forms of business disparities in alcohol policy that lawmakers are always feeling pressure about.”
The Oversight Committee directed its staff to work with the ABC Commission to draft legislation for 2009 that would address the recommendations by the PED.
The Christian Action League is carefully studying the report and will provide its own analysis and recommendations.