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Liquor privatization loses steam in other states

Booze has been on the mind of official Raleigh all spring. Specifically, political leaders have been wondering out loud what ought to be done to reform the state’s ABC system.

A legislative committee studying the issue began their work on Tuesday. And Wednesday, Gov. Bev Perdue BRAC budget cutting committee heard from the head of the state’s ABC system. From a Wilmington Star-News story:


The chairman of the state Alcoholic Beverage Control Commission presented reform options this week that, if enacted, would mean sweeping changes to the way North Carolina handles its liquor.

Jonathan Williams, speaking Wednesday before the governor’s Budget Reform and Accountability Commission, presented a number of options including consolidating the state’s more than 160 local alcohol boards into county or, in the case of more sparsely populated areas, even regional boards.

He also suggested absorbing ABC boards into county governments, thereby making them more efficient and making elected county commissioners directly responsible for the ABC’s performance.


Click here to read the whole thing.

Williams did not tackle whether selling off the state’s interest in the liquor system – essentially privatizing what is now a government function – but Perdue has hired a consultant to at least peg a value to the state’s operations.

States around the country have looked at their government-run liquor businesses as a potential source of revenue. But according to Stateline.org, those efforts have been losing steam. From a Stateline post this morning:


Lawmakers in Mississippi, Vermont and Washington all introduced bills similar to Virginia’s. North Carolina’s governor launched a study on the matter. Major newspapers took note.

“When states look at it, what they find is a system that returns a good revenue, protects public health and meets consumer needs,” says Steve Schmidt, vice president at the National Alcohol Control Boards Association.

But barely a few weeks later, many of those proposals have died quietly. In Virginia and Mississippi, they were withdrawn by their sponsors. In Washington and Vermont, they are bottled up in committee.

How could these heavily-touted revenue streams dry up so suddenly?

The answer varies by state. But a combination of labor and business opposition, concerns over possible higher alcoholism rates and uncertainty over anticipated financial benefits seems to be driving the bills’ demise.


Click here for the whole story.

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Maria Barton

March 11, 2010 - 2:48 pm EST

Only government could take a perfectly recession-proof industry like drinking or gambling, get a monopoly on it, and then have it turn out to be less profitable.

heel4you

March 20, 2010 - 12:51 pm EDT

Thursday, March 11, 2010
No time to pass the bottle
By David Harrison, Special to Stateline.org

William Kerr is skeptical about privatizing State Control Systems. Kerr, a senior scientist for the Alcohol Research Group, a public health think tank, says the 18 control states raise more on a per-gallon basis than their counterparts. In a report for the National Alcohol Beverage Control Boards Association, Kerr found control states receive $53.07 per gallon while the others get $15.47.
“These control systems bring in a lot of money and that money comes in every year forever into the future,” he says.
Any state that is considering a private model should proceed with caution, says Lynn Walding, administrator of the Iowa Alcoholic Beverages Division. Iowa turned over retail sales to the private sector in 1987 but maintained control of the wholesale side. The state also tried hiring a contractor to run its warehouse but later found it was more cost-effective to let state employees run it, Walding says.
“I think the danger in these types of times is for the states to look for short-term solutions and in the process sell off the goose that lays the golden egg,” he says. “You may fix the short-term problem and create a long-term issue.”

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