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Thursday, May 23, 2024

Happy hour legal in N.C.? It could be if new bill passes

A new bill is making its way through the North Carolina General Assembly that could boost economic impact on local bars and restaurants — and the state overall — if passed.

SOUTHEASTERN N.C. — A new bill is making its way through the North Carolina General Assembly that could boost economic impact on local bars and restaurants — and the state overall — if passed.

House Bill 94, also known as “ABC Laws/Local Sales Option,” poses flexibility on rules that disallow bars and restaurants to sell alcoholic beverages at discounted prices during a specific window of time. It addresses six points aimed to improve the industry and relax the grip of the Alcoholic Beverage Control Commission — the state-controlled liquor licensing board. 

READ MORE: Updates to ABC laws gain bipartisan support, await Gov. Cooper’s signature

A happy hour ban went into effect in the mid ‘80s in an attempt to crack down on drunk drivers. Currently, the law requires establishments to sell alcohol at the same price all day — no happy hours, no coupons. It also doesn’t allow businesses that serve food and drink to advertise specific alcohol brands and prices outside of its establishment, whether on signage or through media.

The new bill outlines allowances for:

  • Selling an alcoholic beverage at a price that is different from the usual or established price charged for the alcoholic beverage
  • Selling more than one alcoholic beverage to a patron for a single price
  • Establishing a single price based upon the required purchase of more than one alcoholic beverage
  • Offering “cents off” coupons
  • Offering a meal and alcoholic beverage at a single total price, whether or not the total price reflects a reduced price of the alcoholic beverage
  • Advertising the price and type of alcoholic beverages on outside signage located on the permittee’s premises, via newspapers, radio, television, and other mass media, or on outside signage located on the permittee’s premises and via newspapers, radio, television, and other mass media 

“This is not a Republican or Democrat bill, so I don’t see the governor being opposed to this,” said Jay Ruth, owner of Tinyz Tavern and founding member of the nonprofit group, North Carolina Bar Owners Association.

HB 94 has bipartisan support from sponsors Jason Saine (R-Lincoln), Allison A. Dahle (D- Wake), David Willis (R-Union) and Zack Hawkins (D-Durham). 

The bar association hired lobbyist Logan Martin of Skyline Strategies to push on the organization’s behalf for incremental changes and to engage with legislators to help amend ABC laws. The association put forth the bill last spring to remove mandatory $1 memberships the ABC once required of bars; it passed in the summer. 

The lobbyist and bar association also were crucial in 2021’s passing of four bills for the bar owners association. One waived ABC renewal and registration fees and another reinstated 120 bars’ permits that were canceled without notice during the Covid-19 pandemic. The bills also gained nonpartisan support.

Ruth said the bar association’s membership has grown to more than 200 businesses statewide since launching in 2021. It opened up to restaurants recently and the joint effort within the industry has resulted in more voices speaking out frequently to area representatives about their needs, according to Martin

When Martin pushed for the happy hour bill last summer, he was clear then he didn’t expect it to make it through. It died in the short session without ever being voted upon.

“We wanted to float the idea out there — getting people accustomed to it — and then coming back this year and saying, ‘Hey, this isn’t crazy. It’s like the next step in modernizing the system,’” Martin said, adding the first goal was always to drop the membership dues. 

The happy hour bill has not changed from its original pitch. Though, Martin is hopeful it could gain more support this time around — particularly as the demographics of North Carolina, and its leadership, is shifting.

“It’s a much younger General Assembly than we were looking at in the last session,” Martin said. “I think they are more open to allowing the free market to kind of exist how it should, rather than having arbitrary regulations on it.”

Those who oppose it, he said, are primarily the old guard, as well as organizers like the North Carolina Values Coalition and Christian Action League. 

“Some groups that just are very traditional in their ways and thinking,” Martin said.

However, a spokesperson for the North Carolina Values Coalition clarified the group is not taking a stance on the bill. “It’s not one of the issues we’re focused on,” Laura Macklem said.

Ruth called the ABC rules outdated and not suited for the modern-day constituent. Many transplants moving from other states and areas likely came from a free market, he surmised. North Carolina is only one of 17 that has state-controlled liquor stores and only one of eight prohibiting happy hour.

The state has grown 1.3% — or 133,000 people — between 2021 and 2022, according to the North Carolina Office of State Budget and Management. The office released its revenue numbers Wednesday, showing North Carolina has an additional $3.25 billion anticipated for fiscal year 2022 and 2023. A multitude of factors play into its increase, but among it is services subject to sales tax. 

Ruth said lifting restrictions on happy hour would add to business and state revenue gains. 

“We would increase tax revenue to North Carolina and not just through sales and use tax, but also through, you know, the tax they collect on us from the bottles that they sell us,” he said. 

Not to mention another stream of finances could be generated if the happy bill passes. It would cost restaurants and bars $100 a year to be permitted to host happy hour.

“We would make that back in one shift,” Josh Cranford, general manager of Front Street Brewery, said.

A member of the bar association, Cape Fear Beer Alliance, and the North Carolina Craft Brewers Guild, FSB is Wilmington’s oldest brewery, located downtown. Cranford said he speaks with general managers in the vicinity, many of whom already have been weighing happy hour pros and cons. 

“We have more opportunity to make on-set product than those selling bottles,” he said, “so I wouldn’t want to discount our beer too much.”

A con of happy hour could be competing with a bar next door that has cheaper prices — say a 99 cents domestic beer versus a $3 or $4 craft beer. Yet, Cranford weighs the fact that everyone has its clientele, which may not always overlap. 

FSB used to offer a $1.99 mug all day but discontinued it. He’s not opposed to bringing that back from 3 p.m. to 5 p.m.

Yet, FSB also has the ability to offer food. So specials like a beer and burger at a set price — alcohol cannot necessarily be included in food and drink combos, as the booze has to be sold at the same price to everybody all day — could provide an uptick in diners during a normal slow window.

“Right now, I’m in the boat to do it,” he said. “If we see it’s not working, or we see we’re losing money, we can always pull away from it.”

It’s one of the biggest questions FSB is asked by consumers — “what are your happy hour specials?” — according to sales and public relations manager Ellie Craig.

“It would be a big win for the state,” she said.

Also downtown, The Pilot Hour’s general manager Mason McKaughan said they’ve been focusing more marketing toward the bar area of the riverfront dining facility. It hosted happy hours on food specials at the bar only to help drive up traffic during downtime hours of 4 p.m. to 6 p.m. 

“It went pretty well for a while, actually,” he said. “But, you know, the thing is preparing whole new food dishes just for a two-hour period is not quite as easy as doing certain drinks.”

Though the bill doesn’t go as far as making happy hour legal in North Carolina, it gives cities and counties the power to choose whether to permit it. The goal of framing it this way was to still appeal to rural communities that may not want to embrace the change, whereas an urban city may.

“Some areas are maybe more progressive or more open-minded to alcohol consumption and can vote to allow it,” Martin said. 

Port City Daily reached out to New Hanover County and all commissioners to ask if they would consider approval of this change should the bill pass. The county said staff is looking over the bill with commissioners for their review; none of the elected leaders responded by press.

The bill is in the early stages before it reaches a vote. Martin surmises he will have a better understanding in a month on the outlook. But he is confident, nonetheless.

“We’ve been talking with Senator Moffitt, who was our big champion on alcohol issues in the House,” Martin said. 

Moffitt (R-Hendersonville) was elected last November to district 48. 

“And he has signaled that he is wanting to put together an alcohol omnibus bill, hopefully including this,” Martin said. 

Other items of action that could make it in would be adjusting the taxation on ready-to-drink cocktails from a spirits-based tax to a wine-based tax (in other words, a can of High Noon, made with vodka, juice and seltzer, wouldn’t be $14 but more in line with White Claw prices of $6).

Something Martin would also like to see in the omnibus would be flexibility on ABC stores from which bars and restaurants can buy. Currently, the businesses are assigned to one store but if the ABC facility doesn’t have the product needed, then the establishment is out of luck.

“The General Assembly is not deaf to those concerns,” Martin said. “Obviously, we would love to see the ABC issue, if possible, purchases from other boards, but the logistics of that are more complicated.”

Martin hopes to see the legislation pass by summer.

[Ed note: The piece has been updated to include a comment from North Carolina Values Coalition.]

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Shea Carver
Shea Carver
Shea Carver is the editor in chief at Port City Daily. A UNCW alumna, Shea worked in the print media business in Wilmington for 22 years before joining the PCD team in October 2020. She specializes in arts coverage — music, film, literature, theatre — the dining scene, and can often be tapped on where to go, what to do and who to see in Wilmington. When she isn’t hanging with her pup, Shadow Wolf, tending the garden or spinning vinyl, she’s attending concerts and live theater.

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