Christian Action League Feature

By L.A. Williams

Earlier this summer, Christian Action League Executive Director Rev. Mark Creech, heralded the defeat of legislation that would ultimately increase alcohol consumption in North Carolina as a "monumental victory." But that victory in the battle doesn't mean the war is over.

In fact, the North Carolina Retail Merchants Association fired the latest volley a month ago, filing a petition asking the state's Alcoholic Beverage Control Commission to give stores that sell alcohol what they couldn't get from lawmakers — permission to give their customers discount coupons for beer and wine for off-premise consumption and permission to tie those discounts to a membership or loyalty card thereby allowing them to track sales and better target their marketing.

The ABC Commission has set a Nov. 8 hearing on the matter, which Creech says would be a "major change" in North Carolina's alcohol control policy.

While stores can and do currently discount alcohol (one recent grocery flyer offered a 30-pack for $5.49 — less than 19 cents per 12-ounce can) the rules require that the price be the same for all buyers and that specials not be tied to membership cards. The NCRMA says the restrictions make it difficult for Tar Heel stores in border counties to compete against their counterparts in Virginia and South Carolina, two of the 22 states where coupons are allowed.

Ironically, while insisting that the rule change is needed to help stores compete and that it is "pro-consumer" since customers are "forever clipping coupons out of their Sunday newspaper circular and checking the weekly grocery advertisements in an effort to stretch their household income," the group also argues that the change would not increase alcohol consumption.

"Quite simply, it would increase competition between retailers, resulting in lower prices to the public," said Andy Ellen, general counsel to the NCRMA, in a Sept. 1 interview. However the petition he filed Aug. 1 says "any discounts will likely be slight due to the fact that the discount must be paid for solely by the retailer."

Ellen said in the interview that research shows the use of coupons has the effect of attracting consumers who otherwise would be more inclined to buy a competing brand or from a competing retailer rather than to increase consumption.

Not so, according to Creech, who said numerous studies confirm that anytime the two-pronged approach — appealing advertising and lower price — is used, there is a rise in consumption levels.

Obviously, the NCRMA believes the change would increase alcohol sales or it would not be making the request in the first place. Are we to assume that more alcohol would be purchased, but not imbibed?

Perhaps even more worrisome than coupons is the fact that the rule change would allow customers to be tracked and targeted for alcohol sales. For instance, a retailer near a college campus could target students, offering beer at a discount price through coupons obtained through the use of a permittee's membership card, or a special rewards type program. Malt liquor makers have already come under fire for targeting their promotions to Blacks and Hispanics, and there is nothing in this proposal to prevent retailers from doing the same.

Furthermore, there is evidence showing direct links between alcohol promotions in college towns and student alcohol use. A Harvard School of Public Health College Alcohol Study in 2001 examined prices, specials and promotions of alcohol at stores surrounding 119 colleges and showed that some 63 percent of the off-premise establishments offered promotions such as volume discounts, advertised price specials or coupons and that the promotions were significantly correlated with college binge-drinking rates.

The same study showed that 73 percent of fraternity and 57 percent of sorority members are binge drinkers. Add that to the fact that about 1,400 U.S. college students are killed every year as a result of alcohol-related incidents and it becomes apparent that new avenues to encourage increased alcohol consumption are the last thing our state needs.

Yet the NCRMA persists.

After getting no response from its request for the rule change from the ABC Commission last spring, the NCRMA took its campaign to the Legislature, with Guilford County Democrat Kay Hagan adding it to House Bill 1025 in June. Creech testified against the provision when it came before the Senate Finance Committee in mid-July and a recommendation by Sen. Fletcher Hartsell, a Cabarrus County Republican, to strike that section from the bill passed 13 to 12.

Still the NCRMA, the Beer and Wine Wholesalers and beer manufacturers persuaded the House ABC Committee to place the coupons provision in another bill, SB 828. But by the end of July the bill was sent back to the ABC committee to die, leading the NCRMA to file the petition now being considered.

In the Aug. 1 petition, the Association says it has spent more than 18 months working on this issue and has the support of alcohol manufacturers and wholesalers.

"This issue was brought to the attention of the ABC Commission almost two years ago," Ellen said. "Hereafter, the Beer and Wine Wholesalers Association, Miller, Anheuser-Busch, the Independent Wineries, the Independent Wine Shops and NCRMA worked for about 18 months meeting and passing drafts back and forth until we finally reached agreement on a proposal."

When the ABC Commission did not take action, and the NCRMA headed to the Legislature, he said the organization faced an upward battle because it was late in the session before they could find a germane bill to amend it to, the issue was controversial in an election year and some legislators felt the commission should be given more time to address the issue itself. Even so, he said the NCRMA felt it could count on 65 to 70 votes in the House for the coupon provision and 28 to 30 votes in the Senate.

Michael Herring, ABC administrator, agrees with many lawmakers that the decision should be made by the commission rather than in the General Assembly and said he felt confident the commissioners would weigh the arguments and determine what is in the best interest of the general public.

Commission chairman Doug Fox declined to comment on the matter before the hearing and Herring said he could not speak for the commission.

But he did say the three-member body, appointed by the governor, is "very sensitive" to underage consumption and takes a "pretty strong stance" against anything that might encourage it.

On a personal level, Herring said he feels the rule change would target the underage, since college students are notoriously short on cash and looking for the best deals, and that it will also hurt small mom-and-pop type stores that can't afford to offer coupons.

"Retailers can already sell beer for whatever price they want to, so why do they need a coupon?" Herring said.

Not surprisingly, the North Carolina Association of Convenience Stores opposes the rule change for economic reasons since convenience stores do not typically offer membership or discount cards and they fear the move would allow the big grocery stores to take away their customers.

The hearing on this matter before the ABC Commission is set for 10 a.m. on Nov. 8 at the ABC Commission office, 3322 Garner Road, Raleigh. The meeting is open to the public and Herring said the Commission would like to hear from any interesting parties. The commission may make a ruling that day or the next, as it has a separate meeting scheduled for Nov. 9.

Under North Carolina law, the Commission must grant or deny NCRMA's rule-making petition within 120 days from its filing, which would put the deadline in late November.

Although Ellen said no decision has been made as to the next step should the Commission stand against the rule change, Herring said he would fully expect the organization would make another trip to the Legislature.

"They have clout down there that they don't have here," he said.

"The culture of the General Assembly is considerably friendly to alcohol," agreed the Rev. Creech, but he added this word of encouragement:

"Our influence is growing and we are making a difference in protecting the public's health."