ABC leaders: Keep state government in the liquor trade

When it comes to liquor sales, North Carolina does it better than any other state and serves the citizens of North Carolina well. On behalf of one of the 168 ABC Boards in the state we strive for excellent customer service and provide substantial revenue to our local governments. The system is not only efficient but provides a service to the citizens of local communities.

House Bill 91, based on recommendations by the General Assembly’s nonpartisan Program Evaluation Division (PED), is not all bad. Especially, since the PED did not recommend privatizing the system after conducting an in depth study. By implementing some of House Bill 91’s provisions, such as allowing ABC boards to make deliveries to bars and restaurants and expanding access to special order products, the current system could get even better.

North Carolina would not benefit from a complete licensure system based on the way we already sell beer and wine. There could be over 9,000 outlets selling liquor; currently, we have about 420 ABC stores. North Carolina does not need a liquor store on every corner. Private business could not make up the difference in revenue or serve the public’s health, safety and welfare like the current system does. Here are just a few reasons why the current system works:

One Mission Focus: State government has plenty of areas that need cleaning up and made more efficient. Letting outside influence tear apart a system that provides citizens with a lot of benefits is not the answer. Just to name a few benefits of the current system: lower property tax, public safety, alcohol education, and rehabilitation.

Resources Saved: Currently the system is completely self-sufficient as the system does not cost a non-drinking citizen a penny. Our current system provides access but balances it with control as alcohol is not an ordinary commodity and liquor is a different product than beer or wine. Through local distributions of profits to local governments, our system helps to keep local taxes from increasing.

ABC Boards Offer Outstanding Customer Service: In 2012, Professor Nicolas Didow (Kenan-Flagler Business School at UNC-CH) conducted a customer service survey of ABC store customers. The customers gave higher grades to the NC ABC stores where they shop than they gave to their local drug store, discount store, bank or grocery store. We support legislation in HB 91 that would allow an ABC board to deliver product to a bar or restaurant for a fee.   Under current law, a fee cannot be charged for such deliveries. The price set by the ABC Commission, which is based upon the suppliers’ price, means consumers across the state pay the same uniform price. This keeps a fair playing field whether you have a large or small establishment. ABC Boards are always willing to adapt as shown from the 2010 recommended PED changes.

Consumer Selection: Consumer selection is far superior as the system stands. Private states vary from state to state. Most of South Carolina’s stores carry limited products. Systems that do allow grocery and big box retailers to sell spirits have limited selection of products and limited sizes. In most North Carolina ABC stores, there are about 1500 products for sale. The current system allows far superior customer service because that is what the employees of the ABC system are there for, specifically spirits, not beer, wine or other grocery products. North Carolina offers a wide range of products, and customers can also order from a special order list.

Local Distilleries: North Carolina has always supported NC distilleries. Our current system has allowed local distilleries to flourish. It is difficult to see local distillery products being more available in groceries and other retail stores that sell beer and wine, given the national liquor brands and competition for shelf space for all alcohol products. In a private retail setting most shelf space is paid for by the product company.

Consumer access and proven facts: Of the 50 states, North Carolina ranks 44th lowest in consumption per capita and 7th highest in revenue per capita. By comparison, South Carolina, a license state, ranks 27th in consumption and 38th in revenue. Our system accomplishes both revenue and public health objectives.   The last three states that have implemented privatization (Washington in 2011, Iowa in 1987 and West Virginia in 1991) have all seen higher consumer prices, less choice, and less revenue for government. In Washington State, the number of retail outlets increased from 328 to over 1400 hours of sale/week increased from 73 to 140 hours. Washington State received only $30.75 million from auctioning off the rights to apply for retail spirits permits at 167 stores.

NC’s nonpartisan Program Evaluation Division conducted two surveys on whether the State should close ABC stores and instead allow private businesses to sell liquor, with only 52% and 47% in support, but they weren’t told that retail prices would increase by 15.7%. Not all citizens agree with the current system but they probably do not agree with higher property taxes either. Which, is exactly what would happen if local government had to make up the revenue losses from ABC store sales.

I can tell you from being on the front lines my counterparts and I have the citizens of our counties best interest in mind and at heart. Private business have their best interests in mind, which is increasing sales of alcohol and lower alcohol taxes. Citizens will suffer the consequences for going private by having higher property taxes, less resources for alcohol education and rehabilitation, and less law enforcement with regards to alcohol.

North Carolinians should be properly informed on how the system works for them before the drastic change that is constantly being proposed or made by uninformed decisions. Once these crucial decisions are made to privatize there is no going back.   As the epidemic of deaths in the country for alcohol, drugs, and suicide are the highest ever, the current control system is the only system that makes sense.

Brantley Uzzell is General Manager of the Lenoir County ABC Board, which is a member of the

North Carolina Association of ABC Boards.