ABC Stores: Prohibition And The Price Of A Good Drink

In North Carolina, the only place you can buy liquor is the ABC store. Long-time Winston-Salem resident and self-professed bourbon lover George Kayiales is convinced that prices are higher here because there's no competition.

“I guess I want to know why North Carolina still gives a monopoly to ABC stores for purchasing liquor.”

For this edition of Carolina Curious, WFDD's Buck Hinman takes a “spirit”ed look at his question.

"Back In The USSR"

Buck and George decided to take a field trip. With its barred windows and plain facade, this ABC store in Winston-Salem looks like a brick box in the middle of an empty parking lot. George Kayiales says the decor leaves something to be desired.

“It reminds me of the USSR. I feel like I just barely escape with a bottle every time,” he says.

He lights up, though, when he walks inside. Shelves are packed with different bottles of booze. But then he notices the prices.

“See, today Woodford Reserve is $38 a bottle. I can remember seeing it for under $30 in Florida. So I think I'm going to go with my standard Bulleit bourbon.”

So, why do different states have different prices? To find out, we have to go all the way back to the beginning of the 20th century.

"Whisky In The Jar:" The Rise of Prohibition

North Carolina has always had strict liquor laws. In 1908, the state enacted Prohibition over a decade before the rest of the country. But things didn't exactly go as planned. Bootleggers quickly established themselves as the new providers of drinks. And their underground businesses flourished.

“During Prohibition, there was actually liquor everywhere. There were all these people selling it illegally,” says Chuck Bolton, a history professor at UNCG. He says alcohol only became difficult to find after Prohibition ended.

“States went one of two ways - they either created some kind of licensing system, [or] there was a smaller group of states, of which North Carolina is one, that essentially created what was a state monopoly over alcohol trade. And actually, this was a way to create even more regulation of the alcohol trade.”

‘ABC' stands for Alcoholic Beverage Control. North Carolina is one of seventeen states to choose a state-run monopoly over alcoholic beverages. So, this brings us back to George's question: are the prices higher here?

"Cheers"

Agnes Stevens with the ABC Commission says, “There are some instances where the retail prices of a bottle of liquor might be higher in North Carolina than in other states, and in some cases, a bottle of liquor is lower.”

She says it's actually the distillers who set the price of liquor. But they don't choose the final amount. There are taxes to consider - and a lot of them, federal and state. Plus, the ABC commission adds its own markup. When all's said and done, it can cost twice the initial price. But local distiller Scot Sanborn says they're not really that bad.

“Yes, there are taxes, but I think if people looked across the spectrum, I'd think we're average in the country.”

Sanborn owns Sutlers Gin, a distillery in Winston-Salem. He adds that the ABC board is a good thing for local businesses, because the little guys have a better shot at prime shelf placement.

"The other gin companies that sell hundreds of millions of dollars would be able to buy up that shelf space. And me and my product, I can't even begin to afford shelf space. I'd be in the back corner. It would never get the exposure to the general public.”

He says he gets a bigger share of his profits. And those taxes bring in money for the state. Last year, liquor sales brought in around $350 million.

So, what about our Curious listener? George Kayiales buys his bourbon of choice. He says the ABC system isn't going to stop him from having a little fun.

“It's just one of those things like food and music…all of those things that make life enjoyable,” he says, laughing.

It's a system that's been around for 80 years. So, if history is any indicator, as long as he's living in North Carolina, it's something George may just have to get used to.