By M.H. Cavanaugh
Christian Action League
July 7, 2016
RALEIGH – Two problematic alcohol provisions tucked into a measure meant to amend some state laws related to business regulations; State and local government regulations; agricultural, energy, environmental and natural resources, failed to advance this year. Both would have given distilleries additional privileges that could have undermined North Carolina’s current system of Alcoholic Beverage Control.
The bill, which was originally about eliminating counties from motor vehicle inspections, was hijacked by the Senate and changed to HB 169-Regulatory Reduction Act.
The legislation as a bill for regulatory reform was controversial not only because of its alcohol provisions but also for much of its other content. When conference committee members were unable to hammer out a compromise between the House and Senate, lawmakers abandoned its regulatory reform language, stripped it, and used the bill to pass the small change made to HB 2 that restored workers’ rights to bring discrimination suits in state courts.
One alcohol provision of concern would have allowed distilleries in North Carolina to increase the number of liquor products they could sell on site at a distillery.
Last year, distilleries won legislation permitting them to sell one commemorative bottle of liquor at the distillery to customers that take a tour of their facilities. The legislation was historic in that it was the first time since the repeal of Prohibition the state authorized the sale of liquor outside of ABC stores.
HB 169, however, would have allowed distilleries to expand the sale of its products on site from one commemorative bottle per year, per customer, to retail sales for one of each brand the distillery manufactures.
Research provided by the Association of the North Carolina Alcoholic Beverage Control Boards shows that there are 34 distilleries in the state, and 21 of them have 3-8 products.
“I said last year we could be confident that the distilleries would be back pushing for additional privileges within a short while. But I had at least hoped they would wait until the end of the next legislative biennium,” said Dr. Mark Creech, executive director of the Christian Action League.
“Provisions of this nature throw sand into the bearings of the well-run engine of the North Carolina ABC,” added Dr. Creech. “Not one of our state’s citizens has ever cast a vote in an alcohol election for spirituous liquor to be sold by a distillery. They voted for sales only in an ABC store. Keeping liquor tightly restricted to ABC stores has worked exceedingly well in minimizing the harms of alcohol use and abuse. This particular provision failed to honor our proper understanding or deference to the long-time recognition that liquor is inherently more problematic than other forms of alcohol,” he added.
This first provision was removed from the bill before it was voted on by the full Senate.
The second provision, which remained in the bill, passed the Senate and carried over to the House, was one that would have allowed distilleries to ship their products out of state. But current state law doesn’t permit a distillery outside of North Carolina to ship its products within this state.
“That’s where the problem lied with the second provision,” said Dr. Creech. “The Commerce Clause of the United States Constitution and a ruling by the U.S. Supreme Court in, Granholm v. Heald, essentially says if we can ship liquor to individuals outside of our state, we must also allow distilleries from other states to send their alcohol to North Carolina.”
According to information provided by the North Carolina Alcoholic Beverage Control Commission, five states presently allow for liquor sales to individuals within and outside of their jurisdictions.
“If the distillers in one of these five states were to sue North Carolina for the right to ship their products here and prevail, a federal court would order distilleries outside of our state be permitted to sell and ship spirituous liquor within the Tar Heel state. This would pose serious negative consequences, undercutting liquor sales from North Carolina ABC stores, weakening our ABC system, but also hurting our state’s control efforts,” said Dr. Creech.
The Christian Action League has always been concerned about internet purchases, the easy access that underage drinkers have today to fake IDs, and the delivery of alcohol products (in this case it would be spirituous liquor) via the Internet and in the mail to their homes, college dormitories, fraternity or sorority houses.
“Fortunately, this second provision ran into considerable resistance in the House and died when lawmakers abandoned the regulatory reform language for tweaking HB 2,” said Dr. Creech.
Dr. Creech further stated he believed the decision lawmakers made last year giving distilleries authorization to sell liquor outside of an ABC store was the first crack in the windshield of North Carolina’s ABC system.
“Make no mistake about it;” concluded Dr. Creech, “There are influences in the General Assembly that have little understanding of how ABC works to protect the public’s health. In fact, they would prefer our state to do away with it and privatize liquor sales. These two provisions would have only further injured it. I’m thankful lawmakers had the wisdom this year not to do that.”