WRAL Investigates

Public vs. private: Should N.C. give up booze control?

Posted November 3, 2009 6:00 p.m. EST
Updated November 3, 2009 8:06 p.m. EST

— The public versus private debate has centered on North Carolina's $720 million a year alcohol business, which is run by the state government.

Some say the state should get out of the way and let private businesses control the booze. Others say that change could create more alcohol advertising and lead to more underage drinking.

North Carolina nets $167 million in taxes each year from alcohol sales at ABC stores. It intentionally requires customers to make a special stop at an ABC store that sells liquor.

"I think from a business standpoint, if they were more conveniently located there would be a bigger return on everything they invest in," said customer Taylor Boyd.

It's comments like that, plus a December 2008 study criticizing the state-run alcohol business, which have some people talking about privatization.

A report by the General Assembly’s program evaluation division found that the state’s Alcoholic Beverage Control system is outdated and needs to change if North Carolina wants to stay afloat in the booze business.

Sen. Tony Rand, D-Cumberland, said he likes the idea of giving local liquor boards the option of selling their stores to private companies.

"I suspect we could make more money getting out of it than we can staying in it," he said.

Experts said they think the state is sitting on $200 million in total retail space.

"If they sold the stores and then put that money in a trust, I think the interest you would earn would be as much as they earn now," Rand said.

Another option would be turning the whole system over to private companies, which could net the state $700 million instantly, according to budget experts. They estimate that each year the state could add $5 million to $25 million more than what it is already getting in taxes on liquor sales.

Critics say those suggestions are troublesome and that privatization could create new problems.

Rev. Mark Creech is with the Christian Action League and said he opposes any effort to privatize.

"You're going to unleash advertising in the state. That would very likely exacerbate the problem of underage drinking," he said. "You have to balance between protecting the public's health and revenue."

Customer Sonya Young said she thinks the current system better controls underage drinking.

"I think this would be best because kids can't get in (the stores)," she said. 

Whatever the future holds, Rand said any change will be complicated.

"It's a significant thing. It's a great deal of problems, and you have to make sure that what you're doing is worth the disruption and turmoil that's going to be caused by doing that," he said.