A new omnibus bill put forth in the Senate proposes more changes to the Alcohol Beverage Control Commission, which oversees the state’s wholesale of spirits.
More than a dozen items are addressed concerning ABC operations in Senate Bill 490. One that will resonate most with consumers involves ABC stores being allowed to open on Sunday, New Year’s Day, July 4 and Labor Day.
Local authority boards — which consist of more than 160 statewide overseeing more than 400 stores — will be able to vote on an ordinance for added hours should the bill pass. Stores would not open on Sunday until after noon, the legislation stipulates.
Charles Hill, the general manager of New Hanover County’s ABC board, told Port City Daily its board members aren’t opposed to more operating hours.
“It would provide a service to the citizens of New Hanover County and, yes, we do get requests from time to time about opening on holidays,” he said.
The North Carolina General Assembly established the ABC system in 1937 to provide uniform laws of distribution, sales, transportation, consumption and possession of spirituous liquor. The state has basically subscribed to the “blue law” — not working on Sundays — throughout its existence.
New Hanover County ABC board chair Bruce Shell will be discussing the omnibus bill on the ABC legislative committee, Hill informed.
There are eight ABC stores in the county, which recorded $65 million in banner sales in 2022, up 10% from 2021, according to a presentation given to NHC commissioners in February. These numbers rose 95% from a decade ago, when the county received $33 million in 2012. It now ranks number three in the state, according to NHC board officials.
The money the ABC brings in provides grants for law enforcement and alcohol education needs. It also helps reduce property taxes — by a penny on the tax rate in 2022, saving residents more than $4 million.
Port City Daily asked how much more revenue could potentially trickle into New Hanover with additional ABC store days added. Hill said it is hard to estimate.
“Some may just choose to shop on the holidays versus the day before,” he said. “That factored in with what days of the week these holidays happen to fall on would also be a factor in sales.”
Currently, only local distilleries sell bottles on Sunday, as passed in House Bill 890, which included updated ABC laws in 2021.
Distilleries this time around could benefit from loosened taxes on ready-to-drink items. For Wilmington’s End of Days, it means saving money on its pre-made, four-pack cans sold through the commission.
Currently, EOD makes a 9.5% alcohol-by-volume canned gin and tonic, a Hurricane (created with its Port of Entry rum) and Cargo Mule (mixed with its Port of Entry vodka). Two more products are in the making to be released in coming months, according to EOD owner Shane Faulkner.
He said if the omnibus bill pushes through, it will make a significant dent to the company’s bottom line and give the distillery equal footing in the fair market.
“The tax difference is $0.30 versus $0.80 for other RTD’s with the same amount of ABV but made with malt,” Faulkner explained.
This savings would be passed on the consumer, too, Faulkner added.
Essentially, it would put EOD’s premade canned drinks in line with hard seltzers, like White Claw Surge, which is 8% ABV and available in retail stores. Since White Claw is malt liquor, the ABC Commission doesn’t control it.
“This bill would move those ready-to-drink products into more of a distributor situation, away from the ABC and into places like Empire [a wine distributor,]” Jay Ruth, founding member of the North Carolina Bar Owners Association, explained. “Then we won’t have to deal with the tax stamps anymore.”
It would save time and be more efficient for ABC’s distributors, as currently every individual can has to be stamped. Yet, Ruth said the stamps fall off once they’re put into coolers.
The new bill also puts forth the option for ABC permittees — restaurant and bar owners — to purchase alcohol from any store within the county. In Wilmington, the entrepreneurs and permit holders are assigned to the LBD (liquor-by-the-drink) distribution facility at 6009 Market St.
Ruth said the move won’t necessarily impact local permit holders. It’s for larger areas, such as Raleigh, which have more than one distribution facility and often face shortages in products.
“That has not been much of an issue here — Charles Hill has done a great job,” said Ruth, who also owns Tinyz Tavern. “Since the pandemic, they’ve kept product stocked, but our members across the state are not as lucky.”
Ruth pointed to Forsyth County having issues in the last two years, while neighboring Guilford is stocked more healthfully.
The ABC Commission experienced a product shortage at the end of 2020 and beginning of 2021 when North Carolina’s liquor sales rose by 30%. ABC stores remained open during the pandemic, as bars were required to close.
The shortage was so stressful that ABC Commission chairman A.D. “Zander” Guy resigned, according to media reports. Hank Bauer was appointed by Gov. Roy Cooper to take Guy’s place in 2021, and the ABC switched its vendor contract to LB&B Associates to manage its warehouses in Raleigh for supply and distributions.
Orders from local ABC boards are processed through state-owned warehouses in the Triangle, which then distribute to the statewide boards. The local boards then assign where permitees can make product purchases.
Ruth would like to see more options open to permit holders. NCBOA works with Skyline Strategies to lobby with legislators on modernizing ABC laws. The groups have been in talks with the omnibus bill sponsor, Sen. Tim Moffitt (R-Hendersonville), to modify it further; the goal is to cross county lines to get products that may be in short supply.
“Just use Jagermeister as an example,” Ruth offered. “If New Hanover is out of Jagermeister and Pender County has 20 cases, it would be nice for us to be able to buy board-to-board and we’re trying to work that out with the GA.”
Yet, that would impact tax-revenue shares, which can be tricky. Each board’s profits benefit the county it’s located in, and how much they keep and dish back to the state and municipalities differ.
In New Hanover, 42% goes back to the state and local distributions, with the rest benefiting the county, while in Pender 65% goes to the county and 35% to municipalities.
“So if you’re a New Hanover County business and you go to Pender County to buy liquor as a retail permittee, they’re going to want that money, right?” Ruth posed. “It’s just going to be a matter of trying to work out the logistics on how we can make that happen.”
SB 490 has passed a first reading and is now in the Senate’s Rules and Operations Committee.
NCBOA was also behind lobbying for the Happy Hour Bill, also in consideration this legislative session.
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