ABC, time to go?
Our best discussion in today's Editorial Board meeting dealt with the proposal that we say it's time for North Carolina to give up its ABC stores. Why should the state continue to monopolize the sale of liquor?
This was prompted by last week's report that businesses with ABC contracts provided free liquor and other perks for hundreds of ABC officials meeting at the Grove Park Inn last week.
We weren't all agreed. The argument in favor of the current system is that it does more effectively regulate the availability of a product that, well, should be tightly regulated. There's a limited number of outlets and limited hours of operation. Prices are higher than they might be in a more competitive environment, which helps discourage over-consumption. And profits provide revenue for local governments.
The opposing view is that liquor sales should be left to the private sector, as are sales of beer and wine, which can be regulated by statute. The government monopoly of the spirits trade is an anachronism left over from the post-prohibition era. Would it make sense for the state to take over the sale of tobacco products, pharmaceuticals or any other commodity? So why liquor? Why shouldn't consumers benefit from the full range of products and competitive pricing that the private sector could offer? And, if ABC officials are potentially subject to the influence of special interests pouring drinks at fancy resorts, is the system any purer than private enterprise?
Can you help us sort this out with your opinion?
Comments (4)
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This is a terrific idea. To address the potential revenue loss (and consumption increase), taxes on hard liquor could be increased. Consumers would still benefit from more choice and greater efficiency.
Posted on July 31, 2007 3:00 AM
Thanks, Dave. Good points. One caveat: Studies say liquor consumption by teens is less in control states than non-control states. Should that fact be taken into consideration?
Posted on July 31, 2007 9:27 AM
Doug:
You're absolutely right that this is a likely consequence. Most of the evidence that I've seen indicates that teen consumption is very sensitive to changes in alcohol policies, so we should expect an increase in consumption.
The question, though, is whether the inconvenience and other problems associated with maintaining state stores is worth these other benefits. Also, there may be better ways of addressing youth drinking.
Let's assume that taxes on liquor were increased so that government revenues from sales remained the same as they are now. The funds that were going to pay expenses for the stores could be used instead to fund alcohol education programs, treatment centers, or youth centers.
Posted on July 31, 2007 6:22 PM
That's a possible approach, but I wonder if it would happen in practice. An analysis by the Distilled Spirits Council finds that the average implied excise tax on spirits is more than twice as high in control states as in non-control states. It may be that it's easier to "tax" by setting high prices at the ABC store.
Posted on August 1, 2007 10:50 AM