In various parts of the country, retail stores that sell liquor are called by all sorts of different names. When they need a bottle of whiskey, North Carolinians might head down to the “ABC Store” (named after the state Alcoholic Beverage Control commission that operates them), while in South Carolina they often say “red dot stores,” because most liquor stores in the Palmetto State display three red dots on their signs. A Michigander might patronize the “party store”, while Pennsylvanians frequent the “state store.”
And then there’s the term “package store,” which is used in various parts of the country, including the Carolinas and New England, where it is often shortened to the “Packy.” Where on earth did that term come from?
One common explanation you hear is that various states, not wanting their citizens to be seen carrying disreputable liquor bottles on the street, mandated that liquor stores sell all their goods in brown paper bags—that is, in packages. This derivation is based upon the method of historical research I like to call “just making stuff up,” for there are no state laws that require that. The real story is a little more interesting.