Lawmakers cracked open controversy over canned cocktails at a meeting at a North Carolina House committee meeting on Tuesday.
The North Carolina House Alcoholic Beverage Control Committee unveiled a substitute bill at its Tuesday morning meeting that serves up a wide array of measures relaxing alcohol and gambling regulations, most of which were not present in the original version of House Bill 921: ABC & Gambling Omnibus Bill.
North Carolina is one of 17 states in the U.S. where the state government has a monopoly on at least some categories of alcoholic beverages, known as “control states,” and one of 10 where the state government operates its own liquor stores.
Among the regulatory changes proposed are measures allowing ABC stores to open on Sundays with approval from local governments, permit bars and restaurants to offer “happy hour” pricing promotions, and allow establishments to serve a customer two mixed drinks at a time. It also includes tax credits for small breweries and microdistilleries and allows the in-stand sale of malt beverages at concerts.
These products are lower in alcohol most of the time than the products that are currently on your grocery store shelf.
– Andy Ellen, president and general counsel of the NC Retail Merchants Association
But the most contested measure, drawing opposition from three speakers in public comment, would allow any store that carries beer or wine to sell premixed cocktails under 13% alcohol by volume. Under current law, those beverages are only sold at ABC stores, and with food at bars and restaurants.
Premixed cocktail sales would be taxed at $2.50 per gallon, compared to 61.71 cents per gallon for beer sales.
Andy Ellen, president and general counsel of the North Carolina Retail Merchants Association, said opening up canned cocktail sales is necessary because it “meets consumers where they are.”
“These products are lower in alcohol most of the time than the products that are currently on your grocery store shelf,” Ellen said. “This is not an attempt to privatize. This is an attempt to serve your constituents, your consumers, where they would like to buy these low-alcohol premixed cocktails.”
He pointed out that 32 states allow traditional retailers to sell canned cocktails, including 12 control states, including North Carolina’s northern neighbor Virginia.
Opponents of the measure cited both moral and fiscal concerns.
“We’ve always known in this state that spirituous liquor was more problematic, and that’s why we treat it differently,” said Rev. Mark Creech, the director of government relations for religious values group Return America. “The public health evidence is clear: when alcohol becomes more available, alcohol-related harms increase.”
Jon Carr, a lobbyist for the North Carolina Association of ABC Boards, said the bill will hurt local revenue by taking away a major source of sales for ABC stores. In Wake County, he said, 11% of sales come from canned cocktails.
“This is the fastest growing alcohol category in the nation,” Carr said. “We’ll have reduced sales because these products will be available at thousands of other locations.”
The canned cocktail measure has prompted fears that the days of liquor control in North Carolina may be numbered. “We’re concerned that premixed cocktail legislation could lead to a broader effort to privatize all liquor products,” said Allen Thomas, president of the North Carolina Restaurant and Lodging Association.
Both Carr and Thomas called for the inclusion of funding for a new ABC state warehouse, saying the current facility in Raleigh is in serious disrepair. Thomas said that funding commitment would demonstrate a continued commitment to the ABC model in North Carolina.
ABC Committee Chair Rep. Ray Pickett (R-Watauga) said lawmakers are “trying desperately to get something in this bill that will fund the warehouse,” but negotiations remain ongoing. “It comes from above us,” he said.
Rep. David Willis (R-Union), one of the committee’s vice chairs, said he is committed to ensuring the ABC system continues to receive legislative support. “I oppose privatization. I think the model that we have right now serves the state the best and provides the best revenue for the state.”
The bill’s primary sponsors are committee chairs Pickett, Rep. Celeste Cairns (R-Carteret), and Rep. Reece Pyrtle (R-Rockingham).
The gambling provisions in the bill, which expand game nights and raffles held by nonprofits, came with comparatively little comment, but was not without opposition. John Rustin, president of the North Carolina Family Policy Council, raised concerns that it would only “further normalize gambling in our state.”
“It would send an awful message, especially to our young children, young adults, and others, that poker, blackjack, roulette, craps and the like are legitimate and harmless activities,” he said.
Another measure in the bill would allow the president pro tempore of the Senate and the House speaker to each appoint one member to the ABC Commission — the latest in a long line of measures by the Republican-controlled General Assembly shifting authority away from the governor toward the legislature.
The ABC Committee has not yet scheduled the bill for a vote, but Pickett said he expects to do so “very soon.”
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