Financial appraisal for NC liquor system suspended

© WTVD (AP)

April 24, 2010 12:35:50 PM PDT
An outside group's financial appraisal of North Carolina's liquor system is being put on hold, a state ABC Commission spokeswoman said Friday, a decision likely to delay Gov. Beverly Perdue giving any recommendation on privatization to lawmakers in the upcoming session. The state Alcoholic Beverage Control Commission and a Chicago firm have agreed in principle to suspend work calculating the value of the state-owned distribution system and hundreds of local retail stores, ABC spokeswoman Agnes Stevens said.

The report was expected by the end of April.

A draft of the suspension agreement Stevens said likely will be signed in the next few days by commission Chairman Jon Williams and Valuation Research Corp. says "potential statutory changes to the system" being considered by the Legislature when it reconvenes next month may affect the valuation.

Other limitations to value some system assets also have been discovered, according to the draft, which says discussions to resume the valuation work will occur after final action is taken in this year's session on ABC-related legislation. The session begins May 12 and is expected to last a couple of months.

Perdue has said she wants the valuation report before making a decision on privatization, spokeswoman Chrissy Pearson said late Friday.

"It would be ill-conceived otherwise," Pearson said.

The delay also will allow the ABC commission and Perdue to back away easier for now from an idea that has received a cool reception by the public while a special legislative study committee considers changes to the ABC laws. Opposition to changing the state's unique liquor system has been overwhelming at two public hearings by the committee.

Alcohol opponents and local governments have told committee members the nearly 75-year-old ABC system has worked well by generating $259 million for state and local governments last year while at the same time keeping liquor consumption low.

North Carolina is among 18 "control" states where government directly controls wholesale and retail liquor distribution, but it's the only one where local ABC boards sell spirits and are essentially independent from state government.

The study committee was formed in response to news reports about a liquor company employee treating Mecklenburg County ABC board employees and leaders to an extravagant dinner and how New Hanover County's father-and-son store administrators got paid more than $400,000 combined.

Lawmakers on the committee have criticized draft legislation that would require local ABC boards to give 2 percent of their gross receipts to the state Alcohol Law Enforcement Division and an earlier version that would have required only one ABC board in each county. The legislation has contained no privatization language.

The commission agreed in February to pay up to $175,000 to Valuation Research to measure how much North Carolina could receive if it sold wholesale or retail functions to a single or multiple vendors for up to 10 years.

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