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 The ABC’s of Antiquated Beverage Controls
by Tom Campbell
September 12, 2007
The recent meeting of local alcoholic beverage control boards at the Grove Park Inn in Asheville pointed out the obvious conflicts of interest that boards such as these encounter. The more important question is why these local or the state ABC boards exist at all?
Following the repeal of Prohibition in 1933, North Carolina needed to develop a policy for control of the sale of spirits. There were two prevalent models, a state licensing system or a state monopoly system. In 1937, the legislature voted to enact a state monopoly system in which the state controlled the warehousing and sale of spirituous liquor. They established the Alcoholic Beverage Control Commission, setting up oversight of local ABC boards and stores in those counties or cities in which voters had approved liquor sales.
North Carolina has 156 local ABC systems operating 400 stores that generated 0 million in retail sales in 2005-06. The taxes paid on these sales amounted to 4 million to the state and almost million to local governments. We earmarked million for local alcohol education.
There are two separate and distinct issues here. The first involves all the moral issues concerning alcohol, namely whether or not it is right to imbibe, who can legally drink and what happens when alcohol is abused. This is a worth debating, but not the point of this discussion. Our state did increase “sin taxes” on cigarettes and saw a resultant decrease in smoking. We have similar taxation controls of alcohol.
The issue of this treatise is our system of warehousing, distributing, and selling spirituous alcohol. North Carolina is one of only 18 states to have a central, monopolistic system and, the best we can determine, our incidence of alcoholism, underage drinking, drinking and driving, and raucous parties are no better or worse than the 32 states that license private sales outlets.
The case for the elimination of the ABC system is strong. The abolishment would eliminate political appointees from using tax receipts to attend high-cost conventions, and from getting wined and dined by liquor distributors and vendors. We could cut an unnecessary layer of public employees as well as the ownership and upkeep of warehouses and stores. The late Marvin Speight established a political power base through his control over the ABC Boards and there have long been stories of payoffs, conflicts, and under the table deals. Big dollars are involved and where there is big money there is the prospect for corruption.
Our state has few problems with beer and wine wholesalers distributing their products to retail outlets, restaurants, private clubs, athletic and other special events. Our licensing and enforcement approach appears to be working relatively well. There is no reason to suspect that a similar system with hard liquor would not work as well.
Our biggest opposition to the antiquated beverage control system is that this is a business the state clearly does not need to be in. A strong and effective private system for licensing and enforcement should be as good or better than what we now have, would net more tax receipts for local governments and our state, and will remove temptations from powerful politicians. That makes a strong case for abolishing the ABC system in North Carolina. |
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