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The Daily Tar Heel

ABC store privatization possible

Alcohol availability, revenues could rise

A proposed change in control of alcohol sales in the state could mean a difference in prices and selection of liquor for North Carolinians.

Alcohol sales in North Carolina have been under state control for 74 years. But a Republican-led N.C. General Assembly could approve legislation to privatize the system, translating to about $300 million in one-time revenue for the state through the sale of required licenses for businesses.

As the state faces a $3.7 billion shortfall, the idea is gaining popularity among legislators.

But Gov. Bev Perdue strongly opposed privatization last week, saying “the juice isn’t worth the squeeze.”

If the state loses control of alcohol sales, it would no longer be able to set prices and decide the kind of alcohol sold in stores.

“I believe that’s important to North Carolinians that we maintain some regulation over what can be a powerful substance,” Perdue said in a speech Thursday to the N.C. County Commissioners Association.

The state has one of the lowest alcohol consumption rates in the country, and to privatize the system would mean to open more North Carolina stores to liquor sales, she said.

“Just because we are in difficult budget times does not mean we should forget the spirit of the people who call this state home,” Perdue said.

N.C. Rep. Larry Brown, R-Davidson, a member of the House ABC committee, said the decision to privatize would not be a long-term solution to solving the state’s revenue problems.

“The sale would help the shortfall of our budget, but that’s only a short-term decision,” he said.

Any change in the alcohol system might also change the amount people pay for liquor.

Prices may decrease with a shift to privatization but could fluctuate in order for the alcohol retailers to make a profit, said Tony Dubois, general manager of the Orange County ABC board.

He also said that if privatization does occur, studies show that consumption would drastically increase due to the added availability of alcohol.

Currently, the state has a low alcohol consumption rate, but the revenues are still high. With privatization, revenues could decrease for ABC stores, Dubois said.

“The revenue issue is a hot topic because the social implications of higher consumption would put a strain on social services that could lead to a drop in overall revenue,” he said in an e-mail.

But a large portion of the public might be in support of privatization, said N.C. Rep. Leo Daughtry, R-Johnston.

People tend to think a private industry can do a better job than a government-owned industry, he said.

“There are other people who just don’t like alcohol being as free to purchase as a commodity like Coca-Cola,” he said. “They would find it offensive.”

The controversy, combined with the governor’s firm stance against the issue, might mean privatization will not pass, Daughtry said.

The state legislature will reconvene Wednesday and is expected to present a bill to privatize the alcohol system during the session.

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