Frequently Asked Questions
Below is a list of the most frequently asked questions from opposition to privatization along with some info about how we got started. If you have any that aren't listed below, feel free to email us and we will add it to the page.
Who are you exactly?
What started this?
Are you being paid?
How the system works now
What we want to change
Won't privatization lead to more illegal sales to underage teens?
What about the benefits to the local communities and the state itself that come from the current system? Won't that go away if we privatize liquor sales?
What are some benefits of privatization?
1) Who are you exactly?
We started as a couple citizens of North Carolina with support from our friends and family. Now as we grow we are a group of North Carolinians who want change and a choice.
2) What started this?
Our push to privatize the North Carolina system actually started with beer. As many of you reading this already know, North Carolina has developed an amazing beer industry with tap rooms and bottle shops popping up everywhere. Naturally, we visited places like Sam's Quik Shop in Durham for the latest product -- even waiting in line for special releases like Bell's Hopslam and talking to the employees about their opinions and suggestions. From their our palettes were opened to the amazing world of whiskey and spirits.
We looked for places to try different styles and watched YouTube reviews. To our disappointment, everyone in NC had virtually the same menu. We went to the local ABC store and the story was the same. Even worse, the employees didn't seem to know about what exactly they sold or what was available in the wider market. This is when we began to research the North Carolina ABC system and realized it was a government office in Raleigh that determined every item that could be sold in the state. There wasn't any flexibility and it was up to local managers to order from a list. Now, having traveled to other states and countries it was clear that other systems were quite different and not at all unlike the experiences from your usual bottle / wine shops right here in North Carolina.
From Japanese Whisky, Calvados, Armagnac, Cachaca to many gaps in even Scotch, Bourbon and Rum -- the NC ABC System was a monolith and a disappointment. It was also clear that states like California, Georgia, Florida and New York were doing just fine with their private systems. A central government entity simply cannot be as responsive as local businesses working with their customers. We started talking to business owners about how hard it was to get specialty drinks for mixed beverages. We talked to businesses in private states about how they negotiate with suppliers and seek to differentiate themselves through product and customer service. This is how we decided this is a reform that should really happen in North Carolina. It isn't 1937 anymore and a system designed with Prohibition fresh in the mind doesn't fit the culture and attitudes in 2016. The citizens of North Carolina deserve a system that enables them, not the opposite.
3) Are you being paid?
No, we have day jobs and this is a free time pursuit. The money put into this has been purely personal funds. We aren't accepting donations right now, possibly in the future -- we will keep everyone posted!
4) How the system works now
- The North Carolina State ABC Commission sets a list of products and prices.
- The State Commission runs a warehouse system where all product must be delivered.
- Localities can elect to establish an "ABC Board" which runs the stores.
- Local board managers are responsible for ordering from the NC Warehouse System.
- Citizens can only buy retail liquor from an ABC store, or single bottle per year at a distillery.
- You can see the pricing breakdown here. Local board markup is 39%. State excise tax is 30%. Profit distribution is 3.5%. 5 cent per bottle goes to rehabilitation and an additional 5 cent per bottle goes to profit redistribution.
- Bars and restaurants pay the "Mixed Beverage Price" which is a $3.75 tax per .75L, sales tax is charged when the business sells to you.
5) What we want to change
- Remove the local ABC boards, replacing them with normal businesses (just like beer/wine)
- Remove the 39% ABC Markup and profit distributions replacing it with a percentage of the revenue for product sold to be redistributed along the same lines as it was with the ABC system. The cost of running the stores is the responsibility of the business. This number would be lower as it doesn't need to fund buildings and employees.
- NOT changing the existing 30% state excise tax.
- License businesses selling retail spirituous liquor.
- The warehouse system and the $1.60 bailment charge go away. Normal distributors sell to newly licensed liquor stores. (Just like beer/wine).
Of course, as with any proposal, we are open to compromise and realize that the final shape of legislation may and likely will be different. The primary intent here is to give the citizens and businesses of North Carolina an actual choice, not to destroy all the good things the ABC system does provide for the communities. If we do this with beer and wine, there is little reason we can't do it with spirits.
6) Won't privatization lead to more illegal sales to underage teens?
We already have the private sale of spirituous liquor, beer and wine -- this is how the many bars, restaurants and convenience stores operate. When going to a government run ABC store, we have seen that people are not always asked for ID when purchasing liquor and they surely aren't running identification under UV light or any other verification other than a glance. The idea that we automatically become a lawless, depraved society as the availability to alcohol increases is the very same argument used in temperance which led to prohibition. It is antiquated thinking and discounts the dozens of other states with private retail sales and the numerous countries around the world who have strong, upstanding societies.
7) What about the benefits to the local communities and the state itself that come from the current system? Won't that go away if we privatize liquor sales?
The benefits to local communities would not have to go away. Legislation doesn't have to be absolute or exclusionary in nature. You can take the existing boundaries of local ABC boards and allocate a percentage of each bottle sold to the same funds as today. Further, a private system could allow for more stores with better thought out locations that may actually generate more revenue for the state and local activities.
8) What are some benefits of privatization?
Our culture is evolving and the explosion of craft beer is a leading indicator of a larger movement which focuses on innovation, quality and variety in alcohol production. Craft spirits are a new, upcoming wave of change that simply do not thrive within a government run system. The ABC stores in North Carolina do not exist to promote their product, to bring awareness to their product or serve North Carolina consumers. We need business, small to large, to be flexible and responsive for the people of North Carolina. I think it speaks volumes that there are no other states talking about bringing their systems under government control -- they are talking about taking public systems private.
Sometimes the best way for government to serve its citizens is to get out of the way, let them be free and let them innovate. A system where local managers (who may or may not even care about the product or local demand) order from a provided list simply cannot support the sheer vastness of what is available in the wider market.