Making Connections

In North Carolina, a “local option” state, every voter, in every county and town, has a say in whether or not spirits are sold in their community.


You might think, at first thought, that such a system would be chaotic.


And the North Carolina system does have a lot of moving parts: at least 157, in fact. There’s the state-level North Carolina Alcoholic Beverage Control Commission (NCABCC) as well as the 156 local ABC boards (which, in turn, operate a total of 398 retail stores).


The system works as well as it does – and it does work well, as North Carolina ranks 45th among states for alcohol consumption but seventh in revenue for the state from the sale of beverage alcohol – because so many people and entities work so well together.


So, perhaps, it is fitting that Doug Fox, the NCABCC chairman, who will be the next chairman of the NABCA’s board of directors, chose “Building Bridges” as the theme of his NABCA chairmanship year. “Doing anything worthwhile is based on relationships,” he declared. And the NABCA is a unique source of relationships for anyone involved in the beverage alcohol business in the control states. First and foremost, the NABCA creates many educational and networking opportunities for its control system members, 18 states plus the Montgomery County Department of Liquor Control and the Worcester County Liquor Control Board. For example, this past April the NABCA sponsored one person from each control state to attend a warehousing trade show, The Material Handling & Logistics Show & Conference, in Cleveland, OH. 


In addition, NABCA member states talk with one another about different approaches to warehousing through the NABCA’s Best Practices program. The North Carolina ABCC has been a particularly interested participant in these activities. Its own 25-year-old, 200,000-square-foot warehouse is operating at more than capacity, with 4.4 million cases made up of 1,800 SKUs moving through the warehouse each year.


The NCABCC is considering its options: expanding the existing warehouse, perhaps vertically, or building one, or possibly more than one, new facility. “With the state’s population projected to grow by 40% in the next 20 years,” Fox wrote in the NCABCC’s 2007 Annual Report, Local ABC Board and Commission Activities, “careful consideration to size and location(s) are being studied to maintain efficient service to both industry and the local ABC boards.” The North Carolina ABCC has been especially interested in new vertical-stack warehouses in Utah and Idaho. “As we all know, it’s difficult to coordinate a one-size-fits-all approach in the control states, since each state varies in its responsibilities as well as the realities of its situation as to, for example, warehouse size, whether it’s bailment, contracted out, how much the state can afford to pay for improvements, etc.,” said Fox. “Ultimately, though, being exposed to new ideas and the latest advances will help provide more expertise to each state and would be a great benefit to the control states overall.”


High-Profile Hires

To further help control state members to share such information, the NABCA has recently hired two consultants. Dave Holiday, who worked with control states for many years in his position at the Distilled Spirits Council of the United States (DISCUS) is charged with “facilitating the exchange of information between the control states and industry,” said Jim Sgueo, NABCA president and ceo. The NABCA has also hired Darryl Stackhouse, who has years of experience working for the Pennsylvania Liquor Control Board. “Darryl’s main responsibility is to improve and expand the NABCA Survey Book,” said Sgueo. The book contains operational and regulatory data from control states, license states and Canadian provinces, gleaned from over 50 annual surveys.


Another valuable asset the NABCA provides to its members is its relationship to the community of beverage alcohol suppliers as well as to other institutions involved in the beverage alcohol business and beverage alcohol policies. “The NABCA is in the unique position of being a middleman and facilitator who can engage the various groups – public health experts, suppliers and the government – to discuss various issues pertaining to beverage alcohol,” said Fox. This is where Fox’s theme of “Building Bridges” really comes in.


“It will be an outgrowth of the work of my predecessors,” Fox said. For example, under the chairmanship of Ed Schmidt, director of the Wyoming Department of Revenue, the NABCA formed the Public Health Advisory Committee. “It is a group of seven individuals from the public health community,” explained Schmidt. “The first meeting convened at the end of March and it will meet once a year with the NABCA Executive Committee. The goal is to have them advise the NABCA on their positions on beverage alcohol policy.” The advisory committee represents a range of research, education, epidemiology and advocacy groups. “We’ve always had a strong relationship with the industry and we hope this helps develop a strong relationship with the public health community,” said Sgueo.


Publicizing Public Health Info

The NABCA seeks to disseminate the latest public health information on beverage alcohol to its members. “During the past year, we’ve created an annotated bibliography covering a wide range of beverage alcohol research. [It was] just printed in April,” said Schmidt, outgoing chairman. “It includes 250 sources [such as studies and papers] compiled under different categories to aid the states in determining effective alcohol policy. It’s been a nine-month project that was approved during Phil Lang’s tenure as chairman.” (Lang is the chairman of the Oregon Liquor Control Commission and was NABCA chairman in 2006.)


The bibliography “covers the pros and cons of lots of relevant subject matter,” said Fox. “For example, you can find out the effect of various closing hours or the effect of different kinds of access to alcohol. It can be very helpful.”


The NABCA also wants to highlight its Alcohol Policy Alliance, which includes members of the beverage alcohol industry and the public health community as well as representatives from the control states. “Our contention is that all members of the beverage alcohol community should have a say in beverage alcohol policy,” said Schmidt.


Fox pointed out, “We are not just purveyors of product but also regulators of product. Helping to facilitate the dialogue between industry and the public health community could have a tremendous side benefit of helping to reduce harm caused by beverage alcohol abuse in our communities.”


Supplier Involvement

Suppliers, for instance, have done a lot to educate their own people about responsible use of alcohol, said Fox. “The companies are becoming much more vocal about their corporate responsibilities and have done an exceptional job of taking a corporate stance and training their people to assume that responsibility,” he said.  “They sure have done their part, they are becoming more vocal and the public should know [about it].”


Schmidt agreed. “On several trips during the course of the year, we’ve met with lots of industry representatives who have instituted impressive social responsibility programs,” he said. “We’ve shared with them our feelings on what is useful from a public policy perspective.”


One of Fox’s goals for his chairmanship year is to meet industry members at their own offices. “We will have frank, open discussions, one on one,” he said. “We’ve met lots of ceo’s and cfo’s, a lot of the power players in the industry, at our offices. It is time for us to go to them.”


Maintaining strong relationships with suppliers is important, said Fox. “We need each other. With the world changing so rapidly, we all need to be better informed and maintain effective relationships with each other.” He gave the examples of new categories of products being developed or the changing demographics of communities in the control states. “We’ll have our concerns and we’ll need to be talking to suppliers,” he said.


Speaking of change, the North Carolina ABCC has been handling its own share of it. Not only is the population of the state increasing rapidly (it has more than doubled over the last 50 years), but so are the number of spirit products. Both things affect business at every level of the North Carolina system, from individual stores to local boards to the commission itself. For example, sales increases – total sales for the NCABCC in 2007 were almost $650 million, an increase of 8.47% over the previous year – and just the sheer number of different products have contributed to the state’s need to increase its warehouse capacity. For many control states, Fox pointed out, “Just the proliferation of SKUs is making warehouses burst at the seams.”


Meanwhile, there is concern, common in the control states that run their own stores, to keep those stores modern and appealing to consumers. In North Carolina, the local boards, in the form of their organization the North Carolina Association of ABC Boards, has instituted its “Not So Extreme Makeover” program to help individual boards in the quest to keep their stores looking good and running efficiently. Now in its second year, the program, with an annual budget of $10,000, which comes from the dues the local boards pay to the association, offers grants – at $5,000, $3,500 and $1,000 – to boards to use to update their stores. This year’s grant winners will be announced at the Association of ABC Boards’ annual meeting in July.


Speaking of modernization efforts, North Carolina, at the state level, has ramped up its educational efforts. Indeed, Fox has been “a strong proponent of education and training” since beginning his chairmanship of the NCABCC in 2004, according to Mike Herring, NCABCC’s administrator.

It wasn’t until 2000 that the North Carolina ABCC even had an education and training division and, for a number of years, that division consisted of one person, Danny Sellers, who remains the Commission’s director of education and training. Now, Sellers has five field agents or trainers working for him and is in the process of hiring more.


Last January, the NCABCC began requiring that all ABC applicants for temporary permits provide proof of Responsible Alcohol Seller/Server Program (RASP) training.


Required RASP Training

In effect, this means that the applicants for permanent permits are required to be trained, since these applicants do get temporary permits while waiting for their regular permit applications to be processed. The application process, involving an investigation of the applicant conducted by a separate state level entity, Alcohol Law Enforcement (ALE), a division within the Department of Crime Control and Public Safety, takes from three to six months.


While the new law for getting a temporary permit requires only the applicant to attend RASP training, the NCABCC encourages its permit holders to send all of their employees for training.

“So far,” said Fox, “We do seem to be seeing fewer violations.”


To meet the need for RASP training, the NCABCC has expanded its class offerings. It has added 20 additional locations that give RASP training throughout the state, including two RASP classes that are held every Wednesday at the ABC Commission office itself, located in Raleigh. The Commission has also developed an in-house computer-based RASP course for the convenience of its permit holders.


The Commission’s range of RASP programs include one for the employees of the local ABC boards. The Commission also helps local boards host RASP workshops for mixed-beverage accounts (on-premise businesses that serve liquor by the drink) in their communities, which are conducted by Commission trainers. The Commission also offers RASP classes to hospitality students at the state’s universities and community colleges as well as classes to the employees of state wineries and for people who will be working at special events, such as the U.S. Open in Pinehurst.


The NCABCC’s education and training division also provides classes on ABC law for local law enforcement agencies and provides information programs for the public, both for the general public and for associations, including the North Carolina Festivals and Special Events Association, the North Carolina Hotel Association and the Association of Convenience Stores.


Alcohol Education At All Levels

As for its public education efforts, the training and education division offers classes for students ranging from the first grade to college level as well as for parents. For elementary school, grades one to three, the program uses a mascot called A.B. Cardinal, who often shows up at the schools. In addition, recently, the Commission added an animated and interactive A.B. Cardinal section to its website ( In middle school, the Commission offers The Illusions Program, which utilizes Fatal Vision Goggles so that middle school students can understand just how impaired a person consuming alcohol can  become. The high school presentation uses music videos and special effects shown on two large theater-style screens. This program, presided over by a Commission trainer, is meant to be conducted in front of large audiences, such as a school’s assembly. It covers information about teenage driving, alcohol advertising and underage-drinking laws.


For college students, the program offered by the Commission is an athletic program. It focuses on teaching college athletes about the adverse effects alcohol can have on their performance and their bodies. The public information program for parents is designed to be taught at events such as PTA meetings.


In addition, the NCABCC is involved in providing grants, often coming through the NABCA, to the educational programs developed by universities, such as the ones developed by Appalachian State University, East Carolina University and West Carolina University, all of which address, among other things, high-risk drinking during college football games. In 2007, the NCABCC provided a grant to Students Against Destructive Decisions (SADD) for their annual conference and to the University of North Carolina, which the university used to produce DVDs of a speech given by the Acting Surgeon General, Kenneth Moritsugu, M.D., MPH, about the need for more action to prevent underage drinking.


In 2008, the NCABCC awarded a grant, via the NABCA, to the North Carolina Youth Soccer Association, which will be used to provide education to underage athletes, their coaches and their parents about the dangers of underage drinking.


The North Carolina ABCC is an active member of the NABCA’s Education Committee and has also worked with the National Responsible Retailing Forum on Best Practices regarding training. It is also currently participating in an alcohol study through Duke University.

In both North Carolina and, through his involvement with the NABCA on the national stage, Doug Fox has been busy building bridges – getting people educated about beverage alcohol issues and getting them talking to each other.


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