Lawmaker proposes scrapping ABC stores, allowing retailers to sell liquor

House Bill 971 would overhaul the state's Alcoholic Beverage Control system, taxing and regulating the industry but doing away with government-run stores. Legislative staff analysis indicates the measure would easily triple the number of places liquor is sold in North Carolina.

This bill is miles from passage. Rep. Chuck McGrady, R-Henderson, who has long sought to revamp the state's dated ABC system, said he won't even try to pass this bill this legislative session, and that he'd be surprised if it passes next year.

McGrady won't even be in the General Assembly after that, unless he changes course on announced plans not to run for re-election.

He said he hoped to spur discussion by bringing his bill out for a committee hearing Tuesday. It immediately got pushback from religious groups and social conservatives and support from the state's restaurant, lodging and retail associations, which promised to fund a new "Free the Spirits" ad campaign pushing for reform.

Rep. Pat Hurley, R-Randolph, led the push against the measure in committee, citing drunk driving and other statistics. Alcohol is the third-leading preventable cause of death in the United States, according to the National Institute on Alcohol Abuse and Alcoholism, which is part of the National Institutes of Health.

"You don't think about the deaths, you think about the money," Hurley said after analysis showed privatization could raise hundreds of millions of dollars more in government revenue.

"You're not helping, you're hurting the people of North Carolina," she said as McGrady stood at the front of the committee room, presenting the bill. "You've done enough this year to hurt the people of North Carolina."

After the meeting, Hurley said she was referring to other bills that passed this year liberalizing state alcohol laws and that she didn't mean to lay that all at McGrady's feet. He did sponsor much of this legislation, though.

Hurley said that, for her, alcohol is "just the devil."

She, and others, also worried that employees at current ABC stores around the state would lose their jobs as the stores are phased out, between now and the summer of 2021 under the bill, in favor of new private stores. The new stores would pay $1,000 a year for an off-premises spirituous liquor permit, and they could also sell beer and wine.

The privatization bill would do away with the state's "mixed beverage charge" of $20 per four liters that restaurants now pay, cutting their costs. It would also change the way liquor is taxed for the general public, moving from a 30 percent tax on a bottle's cost to a $28-per-gallon excise tax.

That would make cheap liquor a little more expensive and high-end liquor a little less expensive.

There are fewer than 500 ABC stores in North Carolina, all of which are managed by local ABC boards.

McGrady's bill once capped the number of private stores that could be permitted, in the first year of reform, at 1,500. As legislative staffers tried to calculate the bill's fiscal impact, they assumed all 1,500 permits would be issued in the first year.

That cap has since been removed from the bill.

McGrady said the number of available permits is one of many things that can be discussed as the bill moves forward.