An organization is hoping to make fundamental changes in Raleigh when it comes to the operations of bars across the state.
The North Carolina Bar Owners Association, a nonprofit founded a year ago, is working to convince legislators to bring forth at least two bills during the N.C. General Assembly’s short session that would change how the state-run ABC Commission operates.
North Carolina is one of 17 states that allows the government full control over selling, purchasing, manufacturing, consuming, transporting, and possessing liquor and spirits. It regulates beer and wine sales as well. The Alcohol Beverage Control Commission, founded in 1937 after Prohibition, has 171 boards in 100 counties.
“There’s no uniform policy across the state when it comes to those boards,” said founding NCBOA member Jason “Jay” Ruth, owner of Tinyz Tavern in Wilmington. “Each county is different. Each one of the state’s permitees order differently, they get different products.”
He calls many of the laws the ABC institutes outdated, even “draconian.”
The association’s lobbyist, Logan Martin with Skyline Strategies, has been advocating for a handful of issues ahead of the assembly’s short session. First is the removal of memberships. North Carolina law mandates bars that bring in 30% or less in food or nonalcoholic sales charge a $1 annual membership fee to customers.
“There’s no reason people should have to sign in and give their name to come in and have a drink when they can go into a restaurant and don’t have to do the same thing,” Ruth said.
NCBOA is also hoping to ameliorate pricing regulations. For example, happy hour is illegal in the state of North Carolina, as alcoholic beverages sold in restaurants and bars must remain the same price all day.
Advertising edicts are also strict, with drink specials only allowed to be promoted inside establishments.
Martin has successfully seen through 150 pieces of legislation for clients, including full bills, budgetary line items, pilot projects, minor reforms, and “technical corrections,” he confirmed.
“I often see my profession in three main parts: fixing problems, building bridges, and acting as a guide,” Martin said. “Most clients need connections to lawmakers, community leaders, or business groups to help address those problems.”
Last year, Martin led the charge on four bills for the bar owners association. One waived ABC renewal and registration fees for 2021 and another reinstated 120 bars’ permits that were canceled without notice.
“We were the ones who got that information into the hands of the general assembly and to [Rep. Tim] Moffitt who introduced those bills,” Ruth said. “That was a big help during that time period.”
Ruth said both of his bars, on Gordon Road and on 17th Street, were shut down for over a year due to pandemic-related emergency orders. Nine months in, December 2020, the governor signed an executive order allowing to-go sales of alcoholic beverages. For many, it was too little, too late.
“Governor Cooper unfairly kept us closed and allowed every other alcohol establishment permitted to open in the state,” Ruth said.
Ruth is speaking of breweries, wineries and distilleries. They continued to operate, which Ruth said is due to the organizations’ lobbying efforts, such as the N.C. Restaurant and Lodging Association.
“We had no representation,” he said, “they basically left us out in the wind.”
Ruth and other bar owners across the state filed a lawsuit in December 2020 against Cooper for infringing upon their Constitutional rights to operate their businesses.
Though the suit isn’t associated with NCBOA, it was the push the bar owners needed to rally together for their voices to be heard. In addition to hiring a lobbyist, the NCBOA has been meeting with leaders of the ABC Commission.
They toured Raleigh’s ABC warehouse and met chairman Hank Bauer, who Cooper appointed in December 2021 to replace A.D. “Zander” Guy, the former mayor of Surf City. During the tour Ruth learned the commission “is now doing in one month what they did business-wise the entire year back in 1984 when they first opened,” he detailed.
However, the warehouse, built in the early ‘80s he said, appears “woefully undermanned and way too small.” It can only take in so many deliveries, oftentimes preventing bars from getting product in a timely fashion, if at all in some cases.
Covid has exacerbated supply-chain issues and there has been lack of drivers to transport orders to all boards across the state, Ruth noted.
ABC permit holders are mandated to buy alcoholic beverages from North Carolina licensed wholesalers or spiritous liquor only through its designated ABC store.
“A lot of the product that we cannot get in North Carolina is being found in the privatized states, such as South Carolina, Florida, Georgia,” Ruth said.
The concerns the bar association addresses are not new to the general assembly. Alcohol reform has been put forth in various ways over the last few years.
An omnibus legislation was passed last October allowing distilleries to sell bottles from their establishments from noon to 9 p.m. on Sundays (it did not change ABC store hours, which remain closed Sundays).
Republican Rep. Moffitt of Hendersonville, who chairs the House ABC Committee, has expressed interest in modernizing the system, according to Business North Carolina. Others, too, have advocated for privatization, including former governors Democrat Beverly Perdue and Republican Pat McCrory.
A 2019 fiscal report that made it to the N.C. General Assembly in 2019 as part of attempted alcohol reform legislation suggested “state and local revenue from liquor sales would increase to about $715 million within a few years” if privatized, Business North Carolina reported.
For fiscal year 2021, the commission funneled $616 million into the boards. The county-city distributions equaled more than $123 million with state taxes contributing $438 million. The rest of the money went to local alcohol education and treatment programs, rehabilitation services, and the department of health and human services, with $20 million funding warehouse and distribution center operations.
NCBOA is advocating for a new, more efficient facility for the ABC to run its operations. “We will support any bill and the legislative committees that allow them to build a new building,” Ruth said.
In February, NCBOA started a PAC and IE SuperPAC, both nonpartisan, to support its efforts. The NCBOA PAC will bolster candidates that align with its goals. The other, called “Friends of the Hospitality Industry SuperPac,” will fund ways for NCBOA to get its message out and educate the public, through radio spots, TV commercials, digital or print media.
“A lot of people in the state don’t understand how this system works,” Ruth said on a phone call Wednesday, while passing out NCBOA literature to downtown businesses.
The association wants to grow their statewide membership, currently made up of 168 members, including six in New Hanover and two in Brunswick. Ruth said just last week the NCBOA expanded to include restaurants and other outlets that have a liquor license and would benefit from its advocacy.
“I am fairly confident that we’ll see continued progress on alcohol modernization and reform during the upcoming short session,” the association’s lobbyist said. “It will include reforms around permitting, taxation of ready-to-drink products, how alcohol can be priced/advertised by permittees, and increased access to product inventory.”
Yet, Martin is clear: While many may support the bills, the naysayers will also come out.
“The organization will face opposition from other permittee types, ALE, religious based organizations, and potentially other groups unwilling to support changing the system,” he explained.
Time will work against them during the short session, Martin also suspects, as lawmakers will delay making decisions on any legislation that isn’t imminent. But, according to Ruth, it won’t curtail the group’s efforts; he expects more bills to pop up in the long session.
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