North Carolina: Why we should keep our ABC system of selling alcohol

Source: https://www.newsobserver.com/

BY JOSEPH E. WALL

August 16, 2018

North Carolina’s alcoholic beverage control (ABC) system has served our citizens well for many years, and we should resist all efforts to privatize the system. As a society, do we really want to flood our state with more alcohol? The “C” in ABC stands for “control.” While making bottled liquor available to adult consumers who wish to purchase the product, our current ABC system also emphasizes control and moderation.

Privatization would result in a substantial increase in the number of liquor outlets, which would result in more sales and more consumption, but at what cost to society? For many products, increased sales and consumption are acceptable marketing goals, but when the product is alcohol, control and moderation are equally important.

In North Carolina’s system, state and local government control the sale of bottled liquor. The current system provides more than just control, however. It also ensures that liquor is conveniently available while promoting moderation, producing revenue, and deterring sales to underage buyers.

In North Carolina, revenue from the sale of distilled spirits goes to state and local governments. In states where the system has been privatized, such as neighboring South Carolina, distilled spirits are sold by private businesses, and the profits go to the owners. In both systems (governmental and private), excise and sales taxes generate substantial amounts of tax revenue.

North Carolina’s ABC system is entirely self-funded. ABC store employees are not state employees, and the ABC system is not a drain on the state’s resources. The ABC system contributes millions of dollars each year in tax revenue to the state’s General Fund. If you do not purchase distilled spirits, the current ABC system does not cost you a dime. On the other hand, the current system provides a valuable service to the citizens of the state, both those who imbibe and those who do not.

In North Carolina, local ABC boards provide a significant amount of revenue not only to the state’s general fund but also to local governments. Last year the Wake County ABC system produced over $30 million in state taxes. The Wake County board paid over $10 million to Wake County, the City of Raleigh, and the surrounding towns in Wake County.

If the ABC system is privatized, citizens may see their property taxes increase if local governments have to scramble to replace those dollars. Some, but far from all, of the loss may be offset by taxing property currently owned by local ABC boards, but many store locations across the state are leased and are already on the tax rolls.

Local ABC boards also provide vital financial support to agencies that provide alcohol education and rehabilitation services to the public. For example, last year the Wake County ABC system was one of the principal financial supporters of the Wake County Alcohol Treatment Center, Healing Transitions, Southlight Treatment Center, and the Raleigh Rescue Mission, as well as a number of other organizations.

North Carolina’s current ABC system provides a good balance of revenue production and control. According to the State ABC Commission’s most recent annual report, total revenue distributions by city and county ABC boards last year amounted to well over $400 million.

Control and moderation have been important concerns in North Carolina ever since Prohibition was lifted. Alcohol is not just another commodity. Convenience and pricing are issues that merit consideration in the marketing of any product, but when it comes to the sale of alcoholic beverages the public’s interest in control and moderation is paramount.

Our current ABC system has remained essentially unchanged for many years because it has provided our state’s citizens with a good balance of control, ABC law enforcement, and revenue. It is a control system worthy of preservation, and worthy of your support, whether you are an ABC store customer or not.

Joseph E. Wall is executive director of the NC Association of ABC Boards.