(The Center Square) – The chairman of the agency that controls North Carolina’s liquor stores spoke to the BullDOGEr and other legislators Wednesday about the efficiency of the highly regulated operation and the revenue it generates for the state.
Mixed in the conversation was the long-standing debate over whether the North Carolina liquor business should be privatized.
“The Libertarian in me says the state does not belong with its hand in the alcohol sales business,” said Rep. Keith Kidwell, a Republican from Beaufort County.
Kidwell and John Torbett of Gaston County are cochairmen of House Speaker Destin Hall’s interim Select Committee on Government Efficiency. Their job, similar to Elon Musk and staff earlier this year in President Donald Trump’s Department of Government Efficiency, is to “examine state and local government operations for potential waste, duplication of services, mismanagement, and violations of constitutional liberties.”
Kidwell bills himself the BullDOGEr in a play off the acronym for the agency previously led by Musk.
The North Carolina Alcoholic Beverage Control Commission “provides uniform control over the sale, purchase, transportation, manufacture, consumption and possession of all alcoholic beverages in the state,” according to its website.
Hank Bauer, chairman of the ABC Commission, explained that the liquor companies deliver their products directly to a state warehouse. Stores order their products from the warehouse rather than directly from the liquor companies. The liquor stores pay the state a fee, currently $2.75 a case, that covers the cost of warehousing and delivery.
But the state warehouse has reached its storage capacity, which limits the number of brands that can be offered to ABC liquor stores, Bauer told legislators.
He mentioned the possibility of state funding for a new $210 million fully automated warehouse. The cost could be repaid in a few years with revenues from the ABC commission, he said.
Washington recently privatized its state liquor industry. Sales increased, which could also increase taxpayer revenue, the Kidwell pointed out.
“If you can drop the cost of the product by 10% by getting the state’s hand out of it, you could assess a 10% sales tax on it to make up for any potential lost revenue,” Kidwell said.
But other legislators emphasized the financial benefits for city and country ABC boards, which donate revenue from the 452 liquor stores in North Carolina to local nonprofit groups.
Only two counties in North Carolina, Graham and Madison, have no ABC liquor stores. Individuals are not allowed to open ABC stores, which are managed by boards appointed by local governments.
Private liquor sales are not allowed in North Carolina. North Carolina is one of 17 states with a “control system,” according to ABC.
