Don’t look for any reform of the state’s liquor sale monopoly in this session of the General Assembly. It appears legislators need all the fortification they can get to handle the other pressing issues facing the state – like making it a felony to abuse animals and giving $300 million in corporate welfare to selected businesses, primarily the film industry.
The recommendations of a joint study committee on alcoholic beverage control suffered the same fate as most legislative study commissions. They were gutted by special interest groups and lobbyists.
The result is that the nearly 170 local ABC boards will essentially remain autonomous entities, not subject to state ethics standards, control or oversight by anyone. They won’t even have to make a profit.
Reform neutering is part of North Carolina’s “pay to play” political system. The commission was stacked with lawmakers, local government officials and ABC apparatchiks, none of whom have any interest in making any significant changes to the status quo.
“Right now you can have a drawer full of cash at an ABC store and you just pay the bills and anything else you want to buy,” said Jon Williams, ABC commission chairman. One of the few “reforms” that did survive, at least so far, is requiring local boards to follow the same budget rules as local government.
The rampant corruption in the ABC system made headlines last year. A liquor distribution company spent $9,000 on a dinner for the Mecklenburg ABC board chair and employees. In New Hanover, the liquor board hired a father-son team as its top administrators with $330,000 in salaries and $50,000 in bonuses.
North Carolina is among 18 states where government controls liquor sales, but it’s the only state where local ABC boards are virtually independent of anyone’s control.
If a private business was operated as corruptly and inefficiently as North Carolina’s ABC boards, not only would heads roll, some folks would go to jail and the businesses would probably go out of business.
It’s no wonder the state monopoly on liquor sales is rife with corruption. The very fact that the State sells such a product is a contradiction. How is it moral or ethical for the State to sell a product that can be abused, while at the same time arresting people who abuse it? A bartender caught selling a drink to a minor, or someone already drunk, might be fined, or even go to jail. Yet an ABC store clerk who does the same thing probably won’t even get a reprimand, let alone lose their job.
Government has no business selling liquor, or for that matter, any other product or service that can be more effectively and efficiently provided by the private sector.
Assertions that the State liquor monopoly is necessary to prevent underage drinking or alcohol abuse are not based on fact. There was no sudden surge in alcohol consumption or alcohol-related crime following repeal of national prohibition, although there’s a clear connection between the imposition of prohibition and the birth of organized crime.
A Reason Foundation study comparing the rates of underage drinking, binge drinking, DUI arrests and alcohol-related fatal crashes found little difference between states that have central control of alcohol sales and states that allow private, licensed sales.
The only reason for the State to maintain its liquor monopoly is to provide yet another patronage plum for political insiders and the cronies of elected officials.
The surest, most certain and simplest solution to the corruption in the state’s liquor monopoly is to abolish it, a position the North Carolina Libertarian Party has advocated for years. Yet this obvious reform was not even on the table.
The ABC system is a state-monopoly that forcefully meddles in the free market, imposes the subjective values of a minority on the rest of us, needlessly limits the economic freedom of North Carolina citizens, and violates the rights of citizens to take part in the peaceful, voluntary, social and business activities of their choice.
Abolition is a simple and potentially profitable reform. It would end one type of the corruption cancer in state government by cutting out one of the diseased organs. At the same time, the state would receive a windfall in revenue from the sales of its liquor stores to private entrepreneurs. That should help the General Assembly balance the budget.