WRAL Investigates

WRAL Investigates: Inside the ABC liquor system

Posted February 11, 2010

— North Carolina’s Alcoholic Beverage Control liquor system has been under fire for its big bonuses, perks and salaries that are all over the map.

Some question whether the system as a whole needs to change, but not everyone knows how the system works.

Inside the ABC liquor system Inside the ABC liquor system

The state's lone liquor warehouse is 200,000-square-feet of liquid gold, filled with approximately $3.5 million worth of alcohol.

“We’ll receive approximately 4.5 million cases a year and ship out the same number,” said ABC Commission administrator Mike Herring.

While the debate lingers over whether to privatize liquor in North Carolina, the warehouse is already run by a private company called LB&B. A bailment fee, or holding fee, is added to each case of liquor to pay LB&B nearly $5 million a year to control distribution.

Every bottle of liquor takes a long road to the local ABC stores. It starts at the distiller and is shipped to the warehouse. Local ABC boards then buy the liquor and sell it to individual customers and local restaurants. The price goes up each step of the way, and the profit means the ABC system gets no taxpayer funds. It's completely receipt driven.

Mark-up of North Carolina's top five selling liquors:

  • Aristocrat Vodka 80 – distiller 12-bottle case: $5.79 – after mark ups, $67.04
  • Smirnoff Vodka 80 – distiller 12-bottle case: $35.67 – after mark ups, $128.95
  • Seagrams Extra Dry Gin – distiller 12-bottle case: $41.99 – after mark ups, $141.91
  • Burnetts Vodka 80 – distiller 12-bottle case: $18.46 – after mark ups, $93.96
  • Seagram Crown Royal – distiller 12-bottle case: $132.56 – after mark ups, $323.35

With 20 trucks of liquor coming in every day and another 20 going out, each carrying 1,200 cases, Herring says the warehouse is efficient and it might be time for change.

“It does need to be looked at, and again, we will work with the General Assembly and the governor’s office as they remove things to make our system better,” he said.

The system was put in place in the 1930s during the days of moonshine running.

“On the surface, that appears to be an inefficient system today. It worked well maybe 30 years ago,” Herring said.

Now, with the light shining on current troubles of some local ABC boards, lawmakers have the tall task of deciding what, if anything, needs to change in the state's $700 million liquor monopoly.

The governor's Budget Reform and Accountability Commission might take up the ABC issue at its meeting in late February or early March. There was also talk of forming a joint legislative committee to study the ABC system.

18 Comments

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  • Eduardo1 Feb 12, 4:38 p.m.

    juangrande..the flow does not have to stop. taxes on sales will more than makeup for this cash cow. those who run & operate get much more $$$$$$$ than a private business would ever get.As it is now the huge salaries, bonus, pension, sick time, vacation, (graft) etc would never happen in a private store

  • JustOneGodLessThanU Feb 12, 3:25 p.m.

    Tire Of Excuses, which group of "righteous" folks do you think stick their noses into mine & your business and tell us when it's ok for us to buy alcohol and beer and when it is not?

    Which group of pious busy-bodies do you think wants to control our personal drinking life?

    Hint: the Sunday morning limit is a dead give away.

    In fact, we're probably lucky that they allow us to buy ANY liquor or beer. ;-)

  • seeingthru Feb 12, 2:46 p.m.

    where I'm from you can buy it about anyware, grocery store small mom and pop store etc, oh It's going to snow---guess where I'm going--lol

  • Clownsruletheworld Feb 12, 12:54 p.m.

    The state of North Carolina has zero moral authority to tell me anything. As long as it controls the gambling and liquor business, then I regard it on the same level as I do hookers and mobsters.

  • southrenbell222 Feb 12, 12:04 p.m.

    Heaven help us! We certainly don't want it to continue in an efficient manner....Does anybody think that they might have left off an "i" and and "n" before efficient or are they giving a true insight into government thinking?-Concered

    I was thinking the same thing....

  • manofjustice Feb 12, 11:57 a.m.

    I don't care what they do as long as I gets my Tekeela.

  • JuanGrande v3.0 Feb 12, 11:49 a.m.

    ABC stores are a never-ending revenue stream for the state. The State Govt will do everything in its powers to keep this cash cow alive.

  • Card Player Feb 12, 11:41 a.m.

    The state should not sell anything. When politicians can affect sales, corruption is guaranteed. Forget the moral implications of the state being the sole proprietor of liquor and gambling....

  • Tired Of Excuses Feb 12, 10:50 a.m.

    Why does the state control liquor sales anyway?
    Why so may rules? You can't buy after 9pm, you can't buy on Sunday, you can't buy before 9am...
    The last time I check this was still the United States and if I want to buy a bottle of Jack to go with our coke at 11pm after getting off of work then I should be able too.
    Bars sell liquor by the glass up until 1:30AM then the drunks get in their cars and weave on home. Oh, but I guess THAT'S perfectly acceptable.
    Most people buying liquor at the ABC store plan to drink it at home. Much safer.

  • JustOneGodLessThanU Feb 12, 10:33 a.m.

    Get the State out of the liquor business. If private works for beer & wine...why not liquor? We already have a precedent...just do it the same way.

    And, remove those ridiculous, religion-based Blue Laws about Sunday purchases!

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