North Carolina Alcoholic Beverage Control Commission recommended a new 10-year contract for LB&B Associates to operate the state’s warehouses. LB&B will get $2.75 a case of liquor for handling warehouse operations, up from $1.50 a case, effective Aug. 1. A separate bailment surcharge of $1.15 a case remains unchanged.
“The resulting impact to the per-bottle price for consumers for a typical bottle of liquor is expected to be 20 cents,” the ABC says in a statement. But one distiller told Carolina Journal he questioned the 83% increase.
The ABC’s previous dealings with LB&B have been controversial, with the state auditor saying the ABC paid $13.5 million more than necessary because of poor contract administration over the previous 10 years.
“Whatever they asked for, they got,” State Auditor Beth Wood said. “Without any question, without any verification, without any consultation or proof or justification.
“And in some cases what they said was their reasoning was not true. In 2008 they asked for an increase the next year, and said it was due to price increases for their fuel,” Wood said. “When we examined their fuel cost, it actually went down. Same thing in 2016. When we examined it, it had gone down.
“The power of this vendor and this contractor was just amazing to me that they had this much power and the commission didn’t validate or verify anything.”