by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
My report on North Carolina’s Alcoholic Beverage Control (ABC) system looks at how it creates unique difficulties for the state’s distillers.
Overregulation isn’t just a nuisance. For small businesses like North Carolina distilleries, it can spell the difference between business life and death.
The distillery industry here was erased by state prohibition in 1909, like the beer and wine industry. But breweries and wineries returned faster and have grown much quicker under a license system than distilleries have under strict government control. As of last count, there were 168 wineries and 304 breweries in North Carolina.
Distilleries didn’t start returning to North Carolina until 2005. As of September 2018, the state had only 63 active distilleries.
Most distilleries rely almost exclusively on sales within their home state (see chart). When North Carolina places so many restrictions on distilleries trying to reach customers in their own state, it’s depriving them of their vital, natural consumer base. This is [the distiller] Amber’s problem: her own state is making it hard for her business just to survive, let alone innovate and grow.
Here’s the chart referenced above: