What’s the North Carolina General Assembly Been Drinking This Session?

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Proposed legislation that could impact North Carolina ABC Retail Permit Holders

With the first year of the North Carolina General Assembly’s biennial session well underway, legislators have focused their work on numerous topics. Legislators have reviewed the state’s alcohol licensing laws and have proposed numerous bills which would affect retail permit holders. A separate summary will be completed with additional details on other alcohol-related legislation and its status.

House Bill 94
ABC Laws-Local Sales Option

This legislation was introduced on February 13 by Representative Jason Saine and is currently in the House Committee on Alcoholic Beverage Control. The commonly used title for this legislation is the “happy hour” bill because it establishes the statutory framework to allow for permittees to conduct “happy hour” programs in their establishments. The legislation requires that local cities and counties must first enact ordinances permitting Happy Hours in order for permittees to proceed. If allowed by a local municipality, the on premise retail permittee can apply to obtain a separate Happy Hour Permit.

These permits would allow the holder to do the following:

• Sell an alcoholic beverage at a price that is different from the usual or established price charged for the alcoholic beverage
• Sell more than one alcoholic beverage to a patron for a single price
• Establish a singled priced based on the required purchase of more than one alcoholic beverage
• Offer a meal deal, whether or not the total price reflects a reduced price for the alcoholic beverage (previously, only the meal could be discounted)
• Advertise the price and type of alcoholic beverages on signage located outside the permittee’s premises or via newspapers and other mass media

If passed, this legislation would be effective July 1, 2023

Senate Bill 489
ABC Technical and Clarifying Changes

This legislation was introduced on April 3 by Senators Tim Moffitt and Todd Johnson. It is currently in the Senate Committee on Rules and Operations. It makes numerous updates to Chapters 18B and 130A of the North Carolina General Statutes.

As proposed, the following changes would be made to Chapter 18B, specifically in Section 903:

• Clarify that the permittee during a transitional ownership period can purchase beer, wine and, liquor from wholesalers and local ABC boards during the transitional period.
• Include language to hold harmless the original permittee during the transitional period.
• Include language that if the permit is suspended or revoked due to the actions of the new operator during the transitional period, the original permittee will not be prevented from obtaining a new permit for a different location.

The bill also makes general updates to the definition and usage of the term “bar” in Chapter 18B, Section 1001.

Senate Bill 490
ABC Omnibus 2023

This legislation was introduced on April 3 by Senators Tim Moffitt and Todd Johnson. It is currently in the Senate Committee on Rules and Operations. It makes numerous updates to statutes across the North Carolina General Statutes that pertain to the sale and marketing of alcohol.

The legislation proposes the following changes:

• Reinstates ability to sell cocktails to-go, as was permitted during the pandemic. Currently, permittees can only sell beer and wine to-go or for delivery.
• Allows industry members to provide “advertising specialty items,” such as glassware, cups, coasters, and product displays, including shelving and racks, to retailers as long as the cumulative value of items per brand does not exceed $1,000 per year and the items have not been customized for an individual permittee. The use of industry-branded, plug-in coolers is also permitted as long as the total value of the coolers does not exceed $1,500 per brand.
• Amend 18B-903(c) to update the transitional period for an ownership change to 120 days instead of 60 days and afford the Commission discretion to allow transitional permit holders additional time.

Senate Bill 526
ABC Law Changes

This legislation was introduced on April 3 by Senators Tim Moffitt and Todd Johnson. It is currently in the Senate Committee on Rules and Operations. It makes numerous updates to statutes across the North Carolina General Statutes that pertain to the sale and marketing of alcohol.

It would authorize wholesalers the ability to offer quantity discounts or charge a set fee for the purchase of less than a full case of any product. The bill requires that such discounts must be offered to all retail permittees.

House Bill 692
Restaurants and Bars Buy from Distiller 

This legislation was introduced on April 18 by Representatives Ray Pickett and Jason Saine and is currently in the House Committee on Alcoholic Beverage Control.

This law would allow an on-premise mixed beverage permittee to purchase spirituous liquor directly from the holder of a North Carolina distillery permit as opposed to requiring a mixed beverage permittee to purchase spirituous liquor only through its assigned ABC Board.

House Bill 870
ABC Omnibus Bill

This legislation was introduced on April 18 by Representatives Ray Pickett, Jason Saine, Terry Brown, and Shelly Willingham and is currently in the House Committee on Alcoholic Beverage Control.

The legislation makes numerous changes to various permitting for alcoholic beverage sales by different types of permittees. These changes include:

• Create a “Bring Your Own Beverage Permit.” This would be applied for by a retail permittee and would allow customers to bring their own beer and wine on the permittee’s premises for consumption.
• Allow retail permittee the ability to purchase spirituous liquor from any ABC Board. Currently, retail permittees are assigned one ABC Board at which they can purchase spirituous liquor. Permittees would still be limited to the city or county where they are located.
• Allow mixed beverage permittee to sell private label liquor to its customers.
• Eliminate the requirement for physical mixed beverage tax on liquor bottles held by retail permittees.
• Amend the definition of “cooperative advertising” to exclude:
  • Point of sale advertising furnished by an industry member
  • Advertisements for off-premise special events authorized under G.S. 18B-1114.1, 18B-1114.5, or 18B-1114.7, or events approved by the Commission pursuant to 14B NCAC 15C.1302
  • Print or electronic advertising of on-premises events that are visible or audible to the permittee’s patrons only when on the permittee’s licensed premises.
  • Unpaid internet-based social media advertisements directed to social media users who have opted to receive content from the permittee and who advertise any of the following
    • On-premise brand promotion
    • Malt beverage, wine, or spirituous liquor tastings
    • On behalf of the supplier, the availability of the supplier’s products at two or more retail permittees
    • On behalf of a retail permittee, a listing or promotion that allows an individual to determine the availability of a specific product at permitted retailers in a certain geographic area
    • Events at on-premise retail permitted locations, which advertisement includes logo or trade dress of retail permittee, supplier or retail permittee, and supplier
• Require the ABC Commission to create a centralized inventory management system to allow buyers to view the availability of spirituous liquor at the State warehouse as well as local ABC Boards. It would also require that they implement a process for placing orders for products electronically.