Free the Spirits

Reforming North Carolina’s ABC system will benefit hospitality industry professionals, consumers and the local economy.

This year, state lawmakers introduced a raft of bills aimed at modernizing liquor sales in North Carolina, and with good reason: The current system looks much like it did back in the Prohibition era. The state’s role in selling spirits—currently it functions as a monopoly with 170 local ABC boards in a state comprised of 100 counties—makes buying and selling liquor inconsistent, inefficient, inconvenient and unsustainable for businesses, proponents of the legislation say.

“All restaurants and bars have to navigate this and we are all frustrated beyond words,” says Cheetie Kumar, co-owner of downtown Raleigh restaurant Garland and the adjacent Kings and Neptunes music clubs. “As the food industry [in North Carolina] has evolved and gotten so much national recognition, our hands are tied behind our back when it comes to the cocktail portion.”

Hospitality industry professionals say the outdated system makes doing business difficult for them, that their customers can’t get spirits available for sale in other states, and that local distillers can’t sell their products to them directly or even in many county ABC stores. 

Among other complaints, bar owners and restaurateurs can’t sample spirits they may want to sell beforehand; they have to order from their local ABC board, which may or may not have what they want in stock; they have to order in bulk or make a special order, for which there’s no tracking system; they have to send an employee to pay in person with a check, load bottles into a personal vehicle and drive them back to the bar; and, if they want to carry a spirit their local ABC can’t or won’t stock, well…they’re pretty much out of luck.

“There are products we would like to carry, a greater selection of bourbons, of North Carolina-distilled product,” says Jim Beley, general manager of the Umstead Hotel and Spa. “The [Wake County] ABC decides what they’ll carry, so a lot of guests staying here, from the U.S. and internationally, are surprised that we don’t have certain quality scotches and bourbons. But we’re just not able to get them. And we want to carry local products as much as possible, but the local ABCs can refuse to carry certain products made in our state.” 

Among the bills introduced this session (see below) is House Bill 971, which modernizes the licensure model for liquor sales and would see the state treat spirits sales the same as sales of beer and wine. It would dissolve local ABC boards and allow private businesses to operate wholesale and retail liquor sales. Under the bill, the state ABC Commission would still oversee liquor sales permitting, and the ALE would still oversee law enforcement; the revenues from liquor sales would still be disbursed to state and local governments that could use them for substance abuse prevention and other programs. Privatization would ensure that hospitality industry experts rather than state employees are making decisions about what local bars and restaurants can stock, the bill’s backers say.

“Our [customers] are becoming more and more sophisticated and they’re demanding a higher quality experience,” says Nick Hawthorne-Johnson, co-founder of Durham’s Cast Iron Group that operates Ponysaurus Brewing Co., The Cookery and Dashi, among others. “We want to provide that for them but it makes it difficult for us when we can’t get spirits because the people who stock spirits for the state don’t necessarily know a lot about the products. It’s time we let the state do what it does best, regulate, and let people who know how to supply boutique products supply them.”

Among the backers of the current bills proposed for ABC reform in the General Assembly are the North Carolina Restaurant and Lodging Association, or NCRLA, and the North Carolina Retail Merchants Association, or NCRMA, groups who say reform will benefit consumers, businesses and, largely, the state economy overall. 

“[These laws] are not about more alcohol, or making alcohol easier to access for consumers,” says Lynn Minges, the NCRLA’s president and CEO. “They’re really about improving and modernizing a system and improving inefficiencies, making them more customer service- oriented.”

“It is a major policy shift, so it takes getting the legislation correct, explaining it to [lawmakers] and making sure they understand the community is not going to be detrimentally impacted,” says Andy Ellen, president and general counsel at the NCRMA. “Money will still be flowing into substance abuse programs.”

Ellen says he is optimistic about the chances of at least some of the provisions in the reform bills passing this legislative session, especially if lawmakers are able to get replacement ABC revenues streams in the budget into place. And with recent shifts in the law, such as legalizing Sunday morning alcohol sales, that optimism seems warranted. 

Kumar, Beley and Hawthorne-Johnson are glad lawmakers are finally talking about ABC reform, a conversation they say has long been overdue. 

“The motivation for people being into spirits isn’t to get intoxicated,” says Kumar. “That’s not what it’s about. It’s the reverse—the enjoyment of this craft. At this point, we would take anything to get three or four little things in place that would make it easier.”

For more information, visit freethespiritsnc.com

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2019 NC ABC Bills

Along with H971, these bills also address ABC system reform in North Carolina. Here are some (not all) provisions in each.

H91/S87

ABC Laws/PED Modernization Study

• Allows for purchase of single bottles in spirits orders

• Creates tracking system for special orders

• Allows ABC boards to deliver spirits 

• Gives local governments authority to open ABC stores on Sundays

• Allows liquor tastings at ABC stores

S290/H378

Distillery Regulatory Reform Bill

• Allows NC distillers to have tasting rooms and serve mixed drinks

• Allows liquor permittees to buy directly from NC distillers

H536

ABC Omnibus Regulatory Reform

(Bill contains some of the same provisions as above bills)

• Requires ABC Board to accept electronic payment from liquor permittees

• Allows sale of more than one drink to a single patron (i.e. a round of drinks)

• Allows for sale of beer and wine at college events

• Authorizes new permit for bars selling liquor that’s not a “restaurant” or “private club” designation

• Allows distilleries to sell to consumers in other states