WRAL Investigates

State wants to know how much ABC system is worth

Posted March 1, 2010 2:07 p.m. EST
Updated March 1, 2010 3:32 p.m. EST

— North Carolina has hired an outside consultant to place a dollar value on the state-run liquor distribution business in case lawmakers decide to privatize it.

Lawmakers two weeks ago formed a committee to study possible reforms to the state Alcoholic Beverage Control system in the wake of scandals in both Mecklenburg and New Hanover counties.

Gov. Beverly Perdue sent a letter to lawmakers Monday outlining her thoughts about the future of the ABC system. If nothing else changes, she said, tighter state controls are needed to reduce the possibility of further ethics lapses.

WRAL Investigates reported that the former New Hanover County ABC board administrator made $244,000 a year, and his son earned $135,000 as his assistant. The Mecklenburg County ABC had to repay $9,000 to a liquor company that had picked up the tab for an expensive holiday dinner for board members, employees and their families.

Since lawmakers are looking at possibly privatizing liquor sales, Perdue said she instructed state ABC Commission Chairman Jon Williams to hire a consultant to determine the value of both the distribution and retail sales system.

"In this way, if we decide to privatize any part of the ABC system, we will know what it is worth before trying to sell it," she wrote in the letter, adding that she believes it's the first time any state has undertaken such a step.

John Converse, chairman of the Wake County Board of Alcohol Control, said Monday that he sees no reason to change the existing system. There are about 160 local ABC board statewide, and problems have been found at only two, he told Wake County commissioners.

"We welcome reform that will make our system better," Converse said.

The Wake County ABC was the most profitable in North Carolina during the 2009 fiscal year, he said. The 21 stores sold $75.3 million in liquor and generated $12.8 million in profits, $20 million in state tax revenue and $5.4 million for county and local governments, he said.

Perdue said any plan to privatize liquor sales must be through a contract that the state can renew or submit to new bidders after a set period. Also, any revenue derived from the sale of the ABC system cannot be used to fill budget holes, she said.