N.C.'s booze purview: simple-minded as ABC.

• Author: Gray, Tim
• Position: North Carolina's Alcoholic Beverage Control Commission

Employees were calling sex lines on the company's phones. The computer system didn't work, so records of hundreds of checks were kept on pieces of notebook paper filed in no discernible order. Five years of inventory of one product had piled up because the warehouse manager was ordering "whenever the stacks got low." And $1.2 million of bills hadn't been paid.

No, this isn't a flashback to the savings and loan crisis. It happened earlier this year in Durham, and the perpetrator was the local system of ABC stores.

County commissioners and the state Alcoholic Beverage Control Commission had to step in to restore order to the 12-store system, the state's sixth biggest. It missed its $540,000 annual payment to Durham County because it simply didn't have the money. The debacle suggests it's time to re-examine, retool, perhaps even replace the state's system of government-owned and -operated liquor stores.

The system serves two sometimes-contradictory missions: control the flow of alcohol and make money for state and local governments. But the monopoly breeds inefficiency, and customers don't reap the benefits a free market creates. Four out of five ABC stores in the state, for example, don't take personal checks, and two-thirds won't accept credit cards. A paucity of locations also makes them inconvenient. Only 17 other states sell alcoholic beverages this way.

Defenders of ABC say it protects the public against the ravages of a drunken populace. But that control is so indirect it's ineffective. The administrator of the N.C. ABC Commission, Mike Herring, admits as much: "We can't control the consumption of alcohol. We control the sale. Once someone buys a bottle, he can go home and drink the whole thing, or he can drink it in the car." About the only thing the state system can effectively control is the sale of hard liquor to minors.

And how much good does it do to control liquor sales when 95% of the alcohol sold in North Carolina is beer and wine? "Beer is the beverage of devastation," says George Hacker, who heads the Alcohol Policies Project at the Center for Science in the Public Interest in Washington, D.C. "Because it's most frequently consumed by young people, it's the one involved in the most auto crashes and other harm."

The ABC system dates back to 1935. Prohibition had just been repealed, and the state legislature allowed 17 counties to set up liquor stores. Two years later, lawmakers extended the right to the remaining counties...