The Case

 

North Carolina has one of the best, most efficient liquor sales systems in the country. North Carolina is one of 17 states that “control” the sale of liquor by directly engaging in the sale of liquor. All such states exercise control over wholesale distribution. 12 of the control states also exercise control over retail sales through government operated stores or designated agent stores. Unique to North Carolina is that local voters decide whether to have liquor sales and ABC stores and profits are distributed locally.

For decades, local ABC Boards have provided a variety of choices, and a controlled distribution and sales environment that is safe. ABC boards help counties, cities, and towns with additional annual revenues of $80 million (FYE 2018) to invest in local needs. If the local sales ceased, increased taxes would be needed to replace these revenues. Changing the system would only make it easier for our minors and irresponsible drinkers to access liquor-- with no guarantees for more choice or lower prices. ABC boards also invest $22 million (FYE 2018) in local alcohol education/rehabilitation and local alcohol law enforcement.

A recent survey showed that over 70% are satisfied with the current ABC system and 71% are satisfied with the convenience and selection of liquor stores

Often associated with privatization, increased outlet density is correlated with high levels of alcoholism and violence, increased alcohol-related injury, crashes, and increased underage drinking. Further, Excessive alcohol use is the 3rd leading preventable cause of death in North Carolina. With this in mind, we should be motivated to retain our system of local control, with the public good as the driving goal, rather than a privatized system, driven by profit.


Top Reasons to Keep it Local:

North Carolina’s System Works

North Carolina lets local voters decide whether or not to allow liquor sales at all. Sales generate important revenue for state and local governments, and are used for local alcohol treatment and education programs. Our current system has proven that local control provides maximum benefits.

Statewide, NC has 170 locally appointed ABC boards that own and operate about 433 ABC stores, employing local government employees. These stores all operate in a public, transparent and accountable manner, and generate profits without the use of advertising while providing uniform oversight and pricing and maintaining reasonable hours of operations. 

“Alcohol is not an ordinary commodity.  No other product has brought about two amendments to the United States Constitution. While any alcoholic beverage when abused can pose a public health risk, spirituous liquor with its higher alcohol content presents greater dangers and requires stricter regulation. Our current ABC system provides access while minimizing harms and costs to society. To abandon the current system would be a total lapse of intellectual and moral judgment.”  --Dr. Mark Creech, Executive Director, Christian Action League of North Carolina, Inc.

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North Carolina Has One of the Lowest Liquor Consumption Rates but Still Generates Significant Revenue:

Our North Carolina system appropriately balances access and convenience with control. North Carolina nationally ranks the 44th lowest for consumption rate, while ranking 7th highest in revenue. In control states, liquor consumption is, on average, 14% lower.  It’s simple - more stores lead to increased and excessive consumption.

Note: The below rankings are of 12 southeastern states.

The_NumbersSource: https://www.ncleg.net/PED/Reports/documents/ABC_Modernizing/Modernizing_ABC_Report.pdf

The CDC Task Force Says Regulation Reduces “Excessive” Alcohol Use:

Research from the Centers for Disease Control and Prevention’s (CDC) Guide to Community Preventive Services (Community Guide) shows that regulating the availability of alcohol, including maintaining limits on the number of days and hours when alcohol can be sold, is a strategy that works to reduce excessive alcohol use and related health and social problems and there is strong evidence that privatization of retail alcohol sales leads to increases in excessive alcohol consumption.” --- CDC, Guide to Community Prevention Services

ABC Boards Don’t Sell to Minors:

ABC boards engage in responsible sales by refusing to sell to minors. Local ABC boards have a ZERO TOLERANCE policy regarding alcohol sales to minors and employees are terminated for violations. Studies show that communities with greater accessibility to liquor (more stores) have higher levels of underage access to alcohol.

North Carolina

 The State of North Carolina does not own any liquor.

 The thousands of employees are local government employees.

 The ABC system is self-supported. No state funds are used to operate the ABC stores, or ABC Commission, its warehouse or the distribution system. Those who consume liquor pay for the entire cost of the system.

 ABC Boards distributed $323 million for the State General Fund. (FYE 2018)

 ABC Boards paid $18 million to operate the State ABC Commission and state warehouse and distribution system. (FYE 2018)

 ABC Boards distributed $13 million towards alcohol education and rehabilitation funding in the local communities. (FYE 2018)

 $8.8 million in local alcohol law enforcement is invested back into the community. (FYE 2018)

Privatization

 Washington State converted to private liquor sales in 2011 and consumers have seen higher prices and lower selection as a result. Retail outlets increased from 328 to over 1400 and hours of sale per week increased from 73 to 140 hours.

 Higher density of alcohol outlets is found in privatized states.

  According to a CDC report, “privatization results in increased per capita alcohol consumption, a well-established proxy for excessive consumption.”1

  Studies have consistently shown that privatization is associated with increased per capita alcohol sales. 

 Considering alcohol related revenue, states with alcohol monopolies can potentially generate two to three times the amount of that of states with a private license system.2

  “State control over the [liquor] retail is associated with lower per capita rates of crime for aggravated assaults, fraud, domestic abuse, and vandalism.”3

1 Preventing excessive alcohol consumption: Privatization of retail alcohol sales. (11, April).
2 Zullo, R., Bi, X., Xiaohan, Y., & Siddiqui, Z. (2013). The Fiscal and Social Effects of State Alcohol Control Systems (p. iii).
3 Zullo, R., Bi, X., Xiaohan, Y., & Siddiqui, Z. (2013). The Fiscal and Social Effects of State Alcohol Control Systems (p. iii).

Adverse Affects of Privatization

Increased Outlet Density

HB 971 would provide for 1500 “base” liquor permits/outlets and more permits based on population increases and also on local liquor store elections, to be issued to grocery stores, convenience stores, variety stores, drugstores and to any retail “business” for the retail sale of liquor between the hours of 7 a.m. and 2 a.m, making North Carolina the 3rd highest of the 12 Southeast states in the number of outlets.

Increased Youth Access

An increase in the number of locations selling alcohol affords youth with many more opportunities to obtain and consume liquor.

Increased Violence

Increasing the density of alcohol outlets in a suburb leads to increased rates of violence in that suburb.

Increased Hours of Sale

Under the state-controlled ABC system, ABC Stores must close from 9:00 p.m. to 9:00 a.m. every day and be closed on Sundays and major holidays. HB 971 would allow private sellers to sell liquor between the hours of 7AM and 2AM. Stores in states that license alcohol retailers, like Washington State, tend to have longer and later hours of sales.

Increased Advertising

ABC stores may not promote the sale of their products. In privatized states, liquor signage and promotions are much more prominent.

Increased Consumption Levels

Control states have an average liquor consumption rate 14 percent lower than licensure states and seven percent less for all alcohol products.