- With House Bill 890 becoming law, the General Assembly continues its good work in recent years expanding alcohol freedom in North Carolina
- More freedoms for North Carolina’s distilleries are especially welcome because nearly all distilleries are small, local businesses, doing most of their sales to home-state customers
- While North Carolina remains in the minority of control states for liquor, legislators can continue removing legal and regulatory impediments to the state’s alcohol industry
Ever since 1908, when North Carolina voters passed the Southeast’s first statewide prohibition, North Carolina has been very strict against beer, wine, and especially liquor sales, production, and distribution. That destroyed two major industries, because the century had opened with North Carolina leading the nation in wine production and also leading the nation in legal distilleries (745). The good news is that in recent years the General Assembly has freed up many aspects of alcohol policy, including this year with the enactment of House Bill 890 into law.
A chart from my May 2019 report on North Carolina’s Alcoholic Beverage Control (ABC) System illustrated how comparably strict North Carolina was in its alcoholic regulations. That chart showed several North Carolina prohibitions that were not shared by most other states, nationally or regionally.
In the summer of 2019, the General Assembly passed two laws making significant reforms to the state’s alcohol regulations. Those bills relaxed some regulations affecting distilleries and gave the state’s craft breweries significantly more freedom to self-distribute. Those reforms removed several prohibitions from that chart and expanded what we can have in North Carolina.
New reforms extend alcohol freedom in North Carolina
The new law adds even more things we can have. Among other changes, it also adds several other freedoms that weren’t on that chart but now are in statute. Here are several reforms concerning distilleries:
- Distilleries can be open on Sundays. They would no longer be closed half the weekend — now, just as breweries and wineries, distilleries can make bottle sales on Sundays, from noon till 9 p.m.
- Distilleries can be open on some major holidays, too — New Year’s Day, Fourth of July, Labor Day, and Thanksgiving Day (from 9 a.m. till 9 p.m., unless it’s on a Sunday).
- Distilleries can give free tastings at farmers’ markets now.
- Distilleries can sell mixed beverages at a range of events: “trade shows, conventions, agricultural festivals, farmers markets, local fund-raisers, and other similar events.” (The ability to sell mixed beverages is an important addition because many consumers prefer to enjoy distilled spirits in mixed drinks.)
- Distilleries can sell their own distilled spirits in closed containers at those events, although the language is unclear and appears to limit it to single “airplane bottles” per customer.
- Distilleries can sell directly to visitors without having to subject them to lengthy tours of the facility. Yes, state law concerning distillery bottle sales to “visitors” actually includes the modifier of “who tour the distillery.” This change gives the distillery discretion over the “length, content, and other parameters of the tour” and removes the requirement that the distilleries keep records of the tours.
- Distilleries can have special, personalized labels on their bottles (such as for individuals, businesses, and clubs, and such things as “‘Bottled for,’ ‘distilled for,’ ‘in honor of,’ or other similar language”). Those can be sold at the distillery or at ABC stores.
- Distilleries — and wineries, too — can now join breweries, private bars, and private clubs in being exempt from state sanitation rules that are applied to establishments that prepare or serve food or drink to the general public.
More freedoms for North Carolina’s distilleries are especially welcome owing to the distinctly local aspect of the distillery business. About 92% of distilleries are small, local businesses, and as such, about 92% of their sales are to customers in their home states.
Some other reforms enacted under HB 890:
- People can place online orders for pickup at ABC stores.
- People can purchase growlers as large as four liters (the previous size limit was two liters).
- People can purchase up to two wine or beer drinks at a time at college or university stadiums, athletic facilities, arenas, or sporting events (a common-sense change allowing someone to get a drink for himself and a partner).
- Cities and counties can establish “social districts” in which people may possess and consume alcohol outside as long as it is within those borders (which would be good for street festivals and restaurant districts and, by extension, city and county tourism efforts).
- Bars and restaurants can permanently extend their ABC-licensed premises for outdoor seating with possession and consumption (which was an emergency authorization brought about in response to Covid-19) if local governments allow them.
Other reforms still await action
North Carolina’s legislators have made several good strides freeing up alcohol policy here, but even so, the biggest, most obvious reform is still out there: making North Carolina a license state in liquor sales, as it is with beer and wine. This reform would include dissolving the ABC boards, selling the ABC stores, divesting the state of the ABC warehouse, and freeing distillers from the ABC Commission dictating an approved products list and statewide prices.
Admittedly, doing so is a big legislative lift as well as a public-choice problem that is particularly thorny.
Lawmakers can continue their good work of seeking to remove other impediments in state law affecting the alcohol industry, such as North Carolina’s nationally mocked anti–”Happy Hour” rule and its taxing our ciders and perries at a rate 62% higher than beer. Here’s a recent sampling of other restrictions to target.
Meanwhile, we can raise a glass to good reforms made so far.