Distilleries could sell more bottles direct to tourists

Posted June 7, 2016

One in three businesses with a liquor license in North Carolina is behind on taxes, costing the state nearly $46 million, according to the Department of Revenue. The agency wants to start taking away liquor licenses if the taxes aren't paid, but the idea isn't sitting well with a major lobbying group for bars and restaurants.

— A provision that would expand North Carolina distilleries' ability to sell "commemorative" bottles of their products to those who take tours raised questions during a Senate Rules Committee meeting Tuesday.

The vast majority of liquor bottle sales in North Carolina are conducted by way of Alcoholic Beverage Control stores, which are run by a network of local government entities overseen by the state ABC Commission.

However, last year, the General Assembly passed allow allowing distilleries to sell one bottle of liquor, once a year, to any person who takes a tour of their facilities.

The Senate's Regulatory Reduction Act, which covers a range of topics from turtle sales to environmental policy, expands that provision. Under the bill, any person taking a tour would be able to buy one bottle of each product the distillery produces. So, for example, if the distillery manufactured both gin and bourbon, a tourist would be able to buy a bottle of each but would only be able to do so only once a year.

"That's the key. It is limited to once a year," Sen. Rick Gunn, R-Alamance said.

Local ABC boards and many lawmakers were skeptical of the measure when it moved through the General Assembly last year. North Carolina has long restricted the sale of alcohol, in part to ensure local governments and the state get their share of tax revenue from the sales. Distilleries are supposed to collect excise tax on the bottles they sell and remit it to the state, but they do not have to charge other markups that come from selling through the ABC system.

"We did this last year – the first time in the history of the state we ever sold a bottle of liquor outside an ABC store – and we were going to sell one," Sen. Tommy Tucker, R-Union said. "We've got a good system in place that generates tons of revenue. It limits consumption and (provides) safety for people driving. And now we're back letting distilleries do more and more. I'd like to make a motion to delete this language."

Rules Chairman Tom Apodaca, R-Henderson, said he could offer such an amendment but asked him to do it once the bill reached the floor.

Other members were more supportive of the move.

Sen. Paul Lowe, D-Forsyth, said distilleries in other states offered sampler packs of their products for tourists and gift givers.

"It's quite common, I'm told, in some of our border states," Lowe said. "They sell sampler packs at the distilleries, which seems like a great thing to me, because they make money. That's business, that's revenue. So, why wouldn't we have it set up here so a distillery can sell a sampler pack? That seems like a good thing to me."

That provoked Tucker to point out that Lowe is a preacher by profession.

"Just let the record show that there's a preacher wanting to sell sample packs of liquor in here," Tucker said.

Often, it is religious organizations such as the Christian Action League who oppose expansion of liquor sales.

Lowe, who is pastor at Shiloh Baptist Church in Winston-Salem, offered in retort, "It was a Baptist preacher that invented scotch."

Actually, a somewhat dubious story credits Baptist minister Elijah Craig with playing a key role in creating bourbon.

The full Senate is expected to debate and vote on the regulatory reform bill on Wednesday.

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  • Paul Donovan Jun 8, 2016
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    This state has such archaic laws and processes when it comes to alcohol. Privatize the liquor stores and step into at least the 20th century ! How do they enforce that a person can only buy one bottle of liquor per year at a distillery? These people ought to go to distilleries in Kentucky and Tennessee to see how it is done.