John Locke Update / Research Brief

North Carolina’s Mass of Alcohol Regulations Needs Review

posted on in City & County Government, Economic Growth & Development, Law & Regulation, Rights & Regulation
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Not long ago I wrote a report on the importance of sunset provisions with periodic review of state regulations. In it I equated reviewing old state rules with cleaning out a toolshed.

If you’ve ever done that, you probably know how things can pile up, accumulate dust, and be forgotten. Some tools are still useful and worth holding on to. But perhaps you set something aside that you thought might be useful later. When later arrives, you don’t remember what you were saving it for. You might not even remember what it was supposed to do.

Sometimes we need to do some spring cleaning in state rules as well:

Without review, old rules can clutter up the regulatory “toolshed.” Rules can be — or become — unclear, unnecessary, outdated, obsolete, unduly burdensome, ineffective, and inefficient. Agencies might not even remember why they adopted them in the first place.

I was reminded of that reading John Trump’s recent Carolina Journal column about ignorance of complex ABC rules:

People just don’t know that each boards operates as an independent fiefdom, that distillers winning their approval sometimes have to circumvent and quell old feuds and prejudices. That getting into ABC means local products are relegated to “N.C. Products” shelves, oftentimes near the back of stores. That ABC rules make it increasingly more difficult for small distillers to prosper and grow.

That all spirits are sent to Raleigh and shipped from there, regardless of whether there’s an ABC store just blocks from the producers. That distillers can sell just five bottles per customer, per year, that they can’t make visitors mixed drinks, and that customers at ABC stores can’t possibly sample a product for which, considering taxes, the state has priced at $40 or more. Distillers can’t ship products directly to buyers. The list goes on; brewers and vintners, though on a separate legislative plane, are hampered by the ABC, too.

Now and then you’ll encounter an anecdote about a particular rule governing the alcohol industry here and you’ll find yourself scratching your head. Such as when a list of the nations’ “Dumbest Drinking Laws” puts North Carolina at No. 2 for … banning happy hour? Why’d we do that?

Jon Guze listed a few more examples in his report:

Forty-three different types of permits and licenses are required for 43 different activities involving the sale of alcohol. In the case of a premise licensed to sell alcohol, a new permit is required for every change of ownership. Gambling devices are forbidden, as are premises with living quarters attached, and all licensed premises must adhere to a recycling plan approved by the ABC. There is a rule that forbids the owner of multiple premises from moving alcoholic beverages from one premise to another. There is a rule that restricts happy hours and forbids some kinds of drink specials, and another that forbids distilleries that offer tours from selling any specific visitor more than one bottle per year. There is a rule forbidding the sale of alcohol on public college campuses, and another stating that viticulture and enology may be taught only at colleges, universities, and community colleges. There are rules governing the content of ads for alcoholic beverages, rules governing the size of alcoholic beverages in hotel mini-bars, and rules governing the number of bottles or cans of beer in a “case.” There are rules governing how much alcohol a private citizen may possess and how much he or she may transport into the state. There are rules governing wine tastings. There is even a rule that forbids the sale of alcoholic beverages at bingo games.

But consider all the rules and laws about alcohol in the state:

The chapter of the North Carolina General Statutes that deals specifically with the regulation of alcoholic beverages consists of 123 densely packed pages, and there are many other alcoholic beverage regulations buried in other parts of the statute book. The chapters of the North Carolina Administrative Code that deal specifically with alcohol law enforcement and the Alcoholic Beverage Control Commission consist of 143 pages, and, again, there are other alcoholic beverage regulations buried in other chapters of the Code.

Drilling down further, I find that North Carolina devotes over 75,000 words to regulating alcohol, placing over 1,000 restrictions on alcohol beverages. This count of regulatory restrictions in the North Carolina Administrative Code is made possible by the State RegData platform developed by researchers at the Mercatus Center at George Mason University.

Friends, that’s a really, really big toolshed. It needs a lot of cleaning.

Jon Sanders is an economist studying state regulations, that spreading kudzu of invasive government and unintended consequences. Serving as Senior Fellow of Regulatory Studies and also Research Editor at the John Locke Foundation, Jon gets in the weeds of all… ...

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