Cover Story: Booze control - public vs. private

CHARLOTTE, NC (WBTV) - A liquor company picking up the tab for a nearly $13,000 holiday dinner for local ABC staff renewing calls to reform North Carolina's antiquated liquor system.

By now you may have heard about the lavish holiday party a liquor company bestowed on Mecklenburg county ABC Board members two months ago.

The calls are getting louder for Parks Helms the head of the local ABC Board to resign.  Liquor company Diageo hosted the dinner last November.  The tab $12,700.  Helms and some ABC employees repaid more than $9,000.

But county commission chair Jennifer Roberts says that hasn't quieted critics.  She says, "At this point my gut tells me if we had to vote right now based on what we know we could vote to remove him."

The county commission oversees the local ABC Board and could remove Helms.

The controversy is one more sign critics say North Carolina needs to get out of the business of selling booze.

Governor Perdue is calling for reform as well.  And she has a 2008 report from the legislature that backs her up.

It found that North Carolina's Alcoholic Beverage Control system is outdated and needs to change if the state wants to stay afloat in the booze business.

When it comes to alcohol North Carolina controls it all.  One of only a handful of states responsible for every aspect of booze.. its sales and its regulation.

It's been that day since the days of prohibition.

"It's a monopoly. It really is a monopoly."

Where former MADD state chairman and national board member Cheryl Jones has a problem--- is how can the state adequately oversee it when it's also in the business of trying to sell it?

She says, "You really have a very hard time of controlling something that you're also trying to make a profit off of."

Lavish dinners bestowed on Mecklenburg ABC staff paid for by a liquor company and on the other side of the state six-figure salaries for top ABC administrators in Wilmington.  That and more renewing calls to overhaul North Carolina's Alcoholic Beverage Control system.

A 2008 legislative study found the state could make $700 million instantly by getting out of the liquor business and turning it over to private enterprise.  They further estimate the state could reap another $5-to-25 million over what it's already getting each year in taxes on liquor sales.

But privatization would take it out of the hands of local officials and the money that goes with it.  And charts on display at local ABC stores show customers that amounts to quite a bit.

"I'm not sure that privatizing is going to be the answer to concerns about ethics," says Jennifer Roberts, chair of the Mecklenburg county commission.  "Actually I think having the state involved gives some accountability back to the voters."

Gov. Perdue has ordered her budget reform commission to look into the ABC system when it meets later this week.

The General Assembly would have to sign off on any reforms and any action by the legislative body in the short session this summer is far from certain.

Critics say while it makes sense for the state to enforce alcohol possession and consumption.. controlling sales doesn't allow for things like competition and offering more products.

Says MADD's Cheryl Jones, "You will have the state will still be regulating that. They will be going into these stores and it'll be a lot easier to go into a store that you're not getting your paycheck out of to regulate it."

North Carolina ranks sixth among the states for generating liquor revenue even though its 48th for per capita liquor consumption.

Supporters of the current system point to those as reasons to not change something that's been in effect since the 1930s.

The state is one of 18 states that directly controls wholesale and retail liquor distribution, but it's the only one where local ABC boards sell spirits.