Why so much variation in one nation? Well, ever since the repeal of Prohibition in 1933, liquor control went from being a federal matter to being the exclusive domain of individual states. And each state has chosen to handle things differently, opting for varying (and sometimes changing) levels of retail involvement and regulation over the years, often creating separate sets of laws for the sales of distilled spirits, wine, and beer.What follows is a very general overview of a broad and thorny topic. And this being a cocktails and spirits column, we’re won’t be touching on wine and beer today, but will instead limit our look to the laws surrounding the high-octane, distilled stuff. We hope you’ll enjoy the ride just the same.
Ready? Here we go.
The majority of states in the U.S. leave liquor sales and distribution to private businesses. Individual state laws regulating these private businesses are varied and complex and serve to determine which types of retailers can sell liquor (e.g., dedicated liquor stores only, or grocery stores too), the hours they're permitted to operate (are Sunday or Election Day sales permitted?), etc. Decisions regarding which wholesalers/importers to buy from, which bottles to stock, and what prices to charge are generally left to individual retailers under this system.
Other states get more directly involved in the sales process. There are 18 of these ABC or “Alcoholic Beverage Control” states in total and they fall into two general groups.
The first group of beverage control states is easy to recognize. This group prohibits the sale of liquor in private stores, limiting it to government-owned outlets only:
- New Hampshire (sold tax-free, attracting many out-of-state customers)
- North Carolina (stores are run by individual counties and cities)
The second group of beverage control states might be harder to spot at the retail level. This group permits the sale of liquor in privately owned stores, getting involved instead on the wholesale/distributor end of things, effectively setting minimum prices and determining product selection statewide:
- West Virginia
We should mention too, that in addition to the states in these two major groups, there are a few states in which liquor stores are only government-run in a few areas, or are run by individual municipalities:
- Maryland (government-run stores in 4 counties only)
- Minnesota (some municipalities run their own liquor stores)
- South Dakota (some municipalities run their own liquor stores)
Government. Liquor. Money. Put them all together, and you can expect a little controversy. Many Alcoholic Beverage Control States are under pressure to privatize their operations, stirring up much contention and debate. Here are some of frequently used arguments, both for and against privatization.
Pros of Privatization
Those in favor of privatization in Alcoholic Beverage Control States often argue that privatizing government-owned distributorships and/or stores would lead to:
- Competitive pricing
- Convenience: More stores in more neighborhoods.
- Choice: A greater variety of brands and types of spirits will become available for purchase. If a state-run monopoly chooses not stock a certain product, that product will be unavailable statewide.
- Profits for the state: Sales of state-run distributorships to private companies would reduce state operating costs and create large cash windfalls.
Cons of Privatization
Opponents of privatization argue that diminished government control would lead to:
- Compromised public safety: Some studies indicate that privatization leads more underage drinking and an increase in alcohol-related deaths (see link below).
- Loss of profit for the state: While the sale of government-operated stores and/or distributorships to private businesses would generate short-term profit, a considerable amount of revenue could be lost in the long-run.
- Job loss: Unionized government workers would be laid off.
Readers, we want to hear from you. What have been your experiences with liquor stores and laws in your area? Any compelling arguments for or against privatization we missed?
- National Alcohol Beverage Control Association (NABCA)
- States Look to the Bottle (Wall Street Journal)
- More Private Liquor Stores, More Alcohol Deaths? (Reuters)
Nora Maynard is a longtime home mixologist and an occasional instructor at NYC’s Astor Center. She is a contributor to The Business of Food: Encyclopedia of the Food and Drink Industries and is the recipient of the American Egg Board Fellowship in culinary writing at the Writers’ Colony at Dairy Hollow. She previously covered food and drink in film at The Kitchn in her weekly column, The Celluloid Pantry.