Carolina Journal update on distillery freedom bill

Carolina Journal’s John Trump provides an update on the Senate debate over Senate Bill 290, the distillery freedom bill.

My research brief last week discussed this bill and its features. It would make several reforms freeing up North Carolina distilleries from burdensome restrictions not faced by their peers in many other states.

Among other things, the bill would allow distilleries to:

  • Hold tastings at ABC stores (distilleries can do that in most other states, including every Southeastern state except Florida and Georgia)
  • Receive ABC permits to sell beer, wine, and mixed drinks on premises (distilleries can do that in at least 37 other states)
  • Sell bottles to distillery visitors without limiting them to no more than five bottles in a 12-month period (no longer would North Carolina distilleries face more restrictions on bottle sales to their own visitors than do distilleries in 46 other states)
  • Self-distribute to mixed-beverage permittees and out-of-state consumers (joining distilleries in at least 21 other states that are allowed some freedom to self-distribute)

Here is a key portion of the debate over the bill as highlighted by Carolina Journal:

A sticking point in the process came with a provision allowing distillers to distribute their own state-approved spirits to customers such as bars and restaurants, via local ABC stores. The issue, in fact, led to a proposed committee substitute for the bill, which Gunn presented during the committee meeting.

Opponents of the measure, namely the N.C. ABC and the local boards, were worried about losing control of state alcohol sales and about collecting the appropriate taxes. Now, all liquor that is made in and comes into North Carolina goes through the N.C. ABC and is stored in a warehouse in Raleigh, to be distributed to some 170 local boards throughout the state. Problem is, the local boards aren’t compelled to carry any particular product, so a restaurant that may want to sell, say, an N.C-made whiskey, may be unable to procure it from a the respective local board, which operates independently.

Gunn said, “We are not going to direct distribute. That was very, very critical to our ABC boards and to our ABC commission, and even to some of the other stakeholders. … We have come up with a plan that will, in fact, help us get the product to the permittee so that they have a chance to compete.”

WIth the bill, Gunn said, a permit holder (restaurant or bar) can order a single bottle, which would be delivered to their local ABC store. If the local store is unable to deliver the product, for whatever reason, the store will notify the commission within 48 hours, and the commission will allow the distiller to deliver an approved product to the ABC store for pickup, Gunn said.

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

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