North Carolina’s obsolete alcohol sales bureaucracy was dealt tandem blows this month as its chairman resigned in frustration and a federal judge scrutinized its censorship under a First Amendment microscope.
N.C. Alcoholic Beverage Control Commission Chairman A.D. “Zander” Guy called it quits last week, citing stress over a vendor’s distribution problems and continued complications from the COVID-19 pandemic.
“When you can’t sleep at night and you’re worrying about things that you can’t control, it’s time to readjust,” Guy told The Associated Press, adding later: “I’m done.”
The state buys liquor in bulk and warehouses it for distribution to ABC stores operated by county and city-level government boards, but a private company handles the logistics. Warehouse operator LB&B Associates began using an electronic inventory system when its new contract took effect in July.
The company’s work since then “has not met expectations or the level of service that the ABC customers deserve,” ABC Commission spokesman Jeff Strickland told the AP.
Some county ABC boards told Charlotte television station WBTV that the warehouse has missed weekly shipments or delivered far less liquor than needed to maintain retail sales and wholesale purchases from bars and restaurants.
Guy tendered his resignation to Gov. Roy Cooper, who took some heat for appointing the former Surf City mayor to the post in 2017. Guy was convicted of insurance fraud, though then-Gov. Jim Martin commuted his sentence in 1990 and later pardoned him.
Unlike liquor, which can only be sold through the ABC monopoly, North Carolina allows private sales of beer and wine. But as the agency that licenses and regulates those sales, the ABC Commission still manages to meddle.
A byzantine state law requires it to approve product labels, but it’s not protecting beer and wine consumers from false advertising or even the unlikely possibility of paper cuts. Instead, current commission rules establish the three-member appointed body as equal parts art critic and censor.
The ABC Commission rejected a label for Flying Dog Brewery’s Freezin’ Season winter ale, presumably because the artwork by Ralph Steadman — the illustrator best known for his collaborations with “Fear and Loathing in Las Vegas” author Hunter S. Thompson — was too risqué for this triad of squares.
From a side view, the label shows a naked man warming himself by a campfire in a landscape of snow and ice. Steadman’s drawing isn’t explicit, and Freezin’ Season already received federal regulators’ approval. Yet North Carolina said no, blocking the brew from appearing on store shelves.
Fortunately for craft beer enthusiasts — and unfortunately for ABC busybodies — Flying Dog CEO Jim Caruso is a renowned free speech advocate who’s fought beer label battles in other states and won. So the Frederick, Maryland, brewery sued in U.S. District Court for the Eastern District of North Carolina.
Before the case could be argued, the ABC Commission reversed itself and approved Freezin’ Season, implicitly admitting that its rule against label designs the panel deems “undignified, immodest or in bad taste” wouldn’t survive legal scrutiny.
The state then moved to dismiss Flying Dog’s complaint as moot. Not so fast, said U.S. District Judge Terrence Boyle, who heard oral arguments on the motion to dismiss and reportedly held a deputy attorney general’s feet to the fire on the ABC Commission’s sudden change of heart.
Kudos to Caruso and his attorneys, noted First Amendment litigators Marc Randazza and Durham’s own T. Greg Doucette and North Carolina “beer law guru” Michael Boyer for standing up to these censorious bullies. As this editorial page wrote in August 2019, North Carolina’s nebulous labeling restrictions don’t have a prayer of passing legal muster.
Before the pandemic, state legislators debated dissolving the ABC system as we know it and allowing private sales. An alliance of restrictionists and beneficiaries of the regime’s political patronage won out, but the Prohibition-era law limiting liquor sales to a state-run monopoly is on borrowed time.
The premise that bureaucrats are inherently more responsible than shopkeepers when it comes to overseeing liquor sales remains suspect. While ABC boards may have enough clout to delay reform, “last call” is coming.
Supply shortages at the state warehouse and censorship in the product review room only weaken ABC advocates’ already shaky arguments for preserving the status quo.