Opinion

LIGHTNING EDITORIAL: Simple as ABC: We don't need a sixth liquor store

By Bill Moss, Published: August 26, 2012

Just because the government can do something does not mean it ought to.

The new Henderson County Alcoholic Beverage Control board has three choices as it examines the best way to market government-sanctioned sale of liquor while maximizing tax proceeds to local government: start its own ABC store or stores, merge with one or more of the three town ABC boards, do nothing.
An astute reading of the economics might very well lead the new board to the last option: do nothing.
Currently Fletcher and Laurel Park each operate one ABC store. Hendersonville operates two, with a third under construction on Upward Road.
It's important to keep in mind that the sale of liquor in North Carolina is no model of free market retail. It's a protection racket run by the state, a tightly controlled monopoly that serves as a tax delivery system for the state's general fund, schools, law enforcement and local government. The state skims off a handsome 22.7 percent in taxes and regulates everything about state liquor sales. Stores can't advertise, shop around for the best price or run sales.
As our report in the Lightning last week showed, the local stores are not exactly awash in profits. The state wants to see the stores make a 6 percent profit, though it has no authority under the law to enforce that level. Hendersonville comes closest, at 5.3 percent. Laurel Park is just over break even, at 2.14 percent, yielding $21,350 a year in local proceeds (62 percent to Henderson County and 38 percent to the town of Laurel Park). Had the state not allowed Asheville to build a store less than 2 miles away, Fletcher would be doing much better than its 4.5 percent margin.
"It's not the cash cow a lot of people think it is after you get through paying taxes and our required distribution," said Hendersonville ABC chairman Charlie Byrd, the former city schools superintendent.
Scanning Henderson County, it is hard to find a location where a new liquor store is needed, and even harder to find a location that would not strip sales from an existing store, possibly to the point of making it unprofitable.
Mills River town leaders, having passed on the chance to hold their own referendum, now say they want a store (and a cut of the profits from one). It's a bad idea. It would put Fletcher out of business. An Etowah store would plunge Laurel Park into the red. Edneyville, ABC board members say, might be the only location that would draw from outside the county and sustain existing stores. Does Edneyville want a liquor store? Doubtful.
Given our current population, a non-rising thirst for spirits and flat population projections, there's no need for another ABC store. The smart business decision right now is to do nothing.