The ABCs of ABC Laws

Bar-Bottles

As of June 30, 2013, North Carolina boasted 14 distilleries, 82 breweries and 146 wineries. The N.C. distilleries alone are responsible for adding nearly 40 different products to the shelves in our ABC stores. But navigating ABC laws in North Carolina can be tricky for those seeking to sell and baffling to taxpayers trying to understand what it all means. Here is a rundown of some of the ins and outs of liquor sales that distilleries and restaurants have to follow if they sell or manufacture alcohol.

“Spiritous liquor” is a term used for any distilled spirits such as whiskey, rum, vodka, brandy or gin – which are all about 40 percent alcohol. These make up the primary source for most of the alcohol revenue that state and local governments receive.

State law requires uniform pricing for all liquor sold in ABC stores across the state. Distilleries such as Outer Banks Distilling must ship their product to the ABC distribution center in Raleigh, which then distributes it to local and regional ABC stores. During the 2012-2013 fiscal year, Dare County’s five ABC stores reported almost 14.2 million dollars in gross sales, of which 1.6 million was received back in “local distributions” to the county and its municipalities. Neighboring Currituck County reported almost 4.4 million in gross sales and received over $358,000 back in local distributions. By government statute, the ABC Board must allocate a portion of its profits for law enforcement, alcohol education and rehabilitation programs. In addition, the Dare County ABC Board approved local legislation which re-directs additional profit money over to the Department of Social Services.

Ever wonder where the money goes for a bottle of liquor?

ABC-Bottle-Breakdown

“The income from alcohol sales follows a very complex formula but it represents a very significant local revenue enhancer,” said Ray White, Chairman of Dare County ABC Board. Here’s a sample breakdown:

Bear in mind that if a bar or restaurant purchases the same bottle of vodka to serve its patrons, there is an additional $3.75 mixed beverage tax added to their cost.

White said, “We have strict rules how we make disbursements to the county and the municipalities.” He added, “We run the ABC Board just like we run a business.” He stated that the proof that we have a good system lies in Dare’s profit percentages. For the past 12 consecutive years, Dare County has landed in the ‘top 10’ list of ABC Boards for profit percentage and placed third this past year.