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The Daily Tar Heel

State considering alcohol reforms

Liquor prices could go up with privatization of sales

After controlling alcohol sales for 73 years, the state is considering dramatic reforms, one of which would take ownership of liquor stores out of state hands.

The discovery of controversial practices by several local Alcoholic Beverage Control boards around the state — branches of the state agency that controls all aspects of alcohol sales and production — has led Gov. Bev Perdue and other state officials to review the liquor retail system.

Members of the New Hanover County board resigned after receiving criticism for high salaries, and the Mecklenburg County board was accused of misusing state money in late 2009 when a liquor company paid for a private party.

The ABC commission passed an ethics policy Wednesday in response to those members’ actions. The policy puts tighter restrictions on board members’ expenses.

In addition to the ethics policy, the commission is also discussing several reform options.

These include more state and local regulation, as well as the privatization of sales. That could significantly change the operations, costs and sale of alcohol, if implemented.

A study released by the N.C. General Assembly in December 2008 suggested that the state’s ABC system wasn’t ready for the 21st century because it lacked a clear mission and oversight.

Dan Sykes, general manager of the Orange County ABC board, wrote in an e-mail that privatization would create the opportunity for a “liquor superstore” to open.

He also said it would increase the number of retail outlets selling alcohol because it would become easier to own a liquor store, putting the state under more pressure to deal with alcohol abuse and other negative consequences of higher alcohol consumption.

Pryor Gibson, ABC committee vice chairman for the N.C. General Assembly, said the biggest problem with the current system is that it is extremely large, with more than 161 local boards that operate 411 liquor stores.

The state is unable to cater to the needs of all the local boards, he said.

“Trying to figure out what is best for each of those systems is the biggest headache we have,” Gibson said.

He also said there are clearly issues that need to be resolved in the current system, but he said he does not think privatization will resolve them.

“Probably the best way to administratively apply those differences across the spectrum would be to allow competent local control with oversight,” Gibson said.

Mark Creech, the executive director of the Christian Action League of North Carolina, a conservative Christian organization, said a privatized option would be a bad choice of reform and a detriment to public health.

Creech cited a study conducted by the Canadian Centre for Policy Alternatives, which found that the privatization of liquor sales in Canada resulted in a brief spike in prices followed by a leveling.

“If you privatize liquor sales, you’re going to do away with the current limited number of stores, and now any Joe Shmoe can open liquor stores. The outlets are going to increase significantly,” Creech said.

Contact the State & National Editor at stntdesk@unc.edu.

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