A customer peruses the beer case at Three Rivers Wine and Liquor in Longmont. Liquor stores say grocers would have an advantage in pricing if the proposal goes through. Jonathan Castner/For BizWest

Liquor-law battle heads for 2016 ballot

The November 2016 general election is nearly a year and a half away, but the presidential race already is in full swing — as is a campaign in Colorado that could be just as contentious.

Will grocery stores finally be able to sell full-strength beer, wine and spirits, as they can in most other states? Voters likely will get to decide.

The two sides of the question already have launched power-packed public-relations pushes in what is a clash of two huge economic forces unique to Colorado: a large population of consumers who moved here from other states and brought their retail expectations with them versus a vibrant and ever-expanding Colorado liquor-producing industry — with 287 craft breweries, 75 craft distilleries and 65 wineries in business in the state — that depends on independent liquor stores to give its products exposure and promotion.

The two sides already are waging war on the web and social media, through “Colorado Consumers for Choice” for the supporters and “Keep Colorado Local” for the opponents.


On the Web

 Colorado Consumers for Choice

 Keep Colorado Local


“I don’t suspect we’ll have a problem getting the signatures in front of grocery stores” to put supermarket liquor sales on the ballot, said Chris Howes, president of the Colorado Retail Council and executive director of the Colorado Consumer Choice Coalition, the group spearheading the ballot drive. “We want to be like the 45 other states who have it.”

Colorado historically has struggled to part with tradition. The state didn’t allow branch and interstate banking until the 1980s, and still prohibits motor-vehicle sales on Sundays.

If the chain supermarkets’ 2016 push is successful, the state’s liquor industry would undergo its second break with tradition in eight years. In 2008, state legislators passed Senate Bill 82, allowing retail sales on Sundays for the first time — over the opposition of many of the same liquor stores that now are gearing up to fight the effort by chain supermarkets to bypass the Legislature and go straight to voters.

Opponents of the change — which range from such retail liquor meccas as Wilbur’s Total Beverage in Fort Collins and Hazel’s Beverage World in Boulder to fledgling producers such as Spirit Hound Distillers in Lyons — say they’re fighting to preserve small business and a craft culture that not only creates jobs but also is growing as a tourist attraction.

Supporters, meanwhile, hope to consign the state’s restrictions to the dusty wine cellar of history along with Prohibition. When the Eighteenth Amendment was repealed, states were given authority to set their own rules for who could sell alcohol and when.

“Since 1933, we have invented soft-serve ice cream, rock ’n’ roll, space travel, the Internet and the cellphone, but you still can’t buy real beer or wine in a Colorado grocery store,” the Colorado Consumers for Choice website says. “It’s past time to modernize the state’s liquor code.”

Critics: Idea is bad for economy

The Keep Colorado Local website — sponsored by more than 1,000 independent liquor store owners, craft brewers, local winemakers, craft distillers and other local businesses from across the state — counters, “What they won’t tell you is that the effort will send money out of our communities, force hundreds of small businesses to close, curtail Colorado’s thriving craft industries, undermine safety and give underage kids more access to alcohol.”

Current Colorado law limits retailers to one liquor license, which means that chain grocers can sell liquor at only one location. Whole Foods’ only Colorado liquor selection is at one of its Boulder stores, and Lucky’s Market sells booze only at its Longmont location. Fans of Trader Joe’s “Two-Buck Chuck” wines have to travel to southeast Denver.

Similarly, liquor stores also can hold only one license, meaning each store only has one location — and can’t sell food.

“We’ve grown up this way in Colorado,” said Jim Dean, manager of Hazel’s Beverage World. “We don’t sell food, they don’t sell alcohol. We have 1,600 liquor stores. No one can have more than one. So far, it’s worked.

“It’s good for jobs and the economy,” Dean said. “Some liquor stores are big like mine, with 50 employees, and some are small, with two or three. If they average 10 workers per store, that’s 16,000 employees in Colorado — and then there’s the truck drivers, the distributorships … “

Many of those smaller liquor stores occupy spaces in strip shopping centers adjacent to supermarkets, and Dean predicted nearly all of them would close if grocers could sell full-strength alcoholic beverages, especially because most of the small liquor outlets depend on beer sales for most of their business.

“There’s 300, 400 small liquor stores right next to King Soopers or Safeway. Those guys are going to be gone immediately,” he said. “Do you just put them out of work? The grocery is not going to hire them.”

Under current law, Dean said, “the consumer gets the best of both worlds — independent business people, great selection, great pricing, and their one downside is that they have to make an additional trip” instead of buying beer, wine and spirits at the same place they buy food.

“In theory, that sounds like a nice idea,” he said, “but the grocery stores would only sell Budweiser, Coors and maybe two or three of the top craft-beer items. I have 1,500 different beers.”

If customers can buy alcohol where they buy groceries, he said, they “are going to lose selection, service. The tendency is just to settle: ‘Gee, I’d like to have a nice Bordeaux — but I’ll settle for a red blend, since I’m here.’ If you want to know something about wine, are you going to ask the guy stocking eggs?”

Dean said large liquor retailers such as Hazel’s and Wilbur’s would be hurt as well. “I still have to sell Bud; I can’t just survive selling macadamia-nut liqueur,” he said. “About 20 percent of my customers ask for our help, but 80 percent know what they want — and that’s who the grocery stores want. I don’t want them to take 80 and leave me 20.

Cincinnati-based Kroger, King Soopers’ parent company, “did $25 billion in sales last quarter,” Dean said. “I find it curious that they say their 3.2 beer sales went down when we added Sunday sales. It’s just a turf war for them.”

Advocates: Competition is good

Supporters of liquor sales in grocery stores say the liquor stores’ fears are unfounded, and a 2009 report prepared by Henry Sobanet, now director of Gov. John Hickenlooper’s Office of State Planning and Budgeting, seems to agree.

“Many states with more lenient liquor laws than Colorado’s — permitting grocery and convenience store sales of full-strength beer, wine and spirits — have higher per-capita incidence of liquor stores,” Sobanet wrote, adding that more competition would lead to lower prices for consumers.

“Because the retail profit margin of wine and spirits exceeds that of beer,” he wrote, the impact “on existing liquor stores depends on the mix of beer, wine and spirits in each location. While many liquor stores report that beer is the most popular sale/revenue item, it is not likely that beer contributes proportionately to liquor stores’ profits.”

Howes also disputes the idea that locally produced craft brews wouldn’t find shelf space in grocery stores. “When you look at the real world, that’s not what happens,” he said. “There are two large grocers in Glendale — King Soopers and Super Target — that have that one liquor license, and they have large racks of Colorado craft beers. When retailers can make money by meeting customer demand, there’ll be shelf space.”

Not all liquor stores oppose the expansion.

“I think it’s a great idea, because then maybe I can sell food, cheese,” said Wendy Cohen, co-owner of The Cellar Gourmet Wine and Spirits in Fort Collins.

“I’m a specialty shop. I don’t have name-brand, corporate wines,” she said. “Right now, my tastings have to be free. I can’t sell food. I can’t make wine and cheese baskets. There’s a lot I could do if I could sell food. I have a lot of restrictions I can’t get around. Hopefully this change affects me, too. It shouldn’t just be a one-way thing.

“I don’t see it as a problem. If the customers want more convenience, businesses have to adjust. I’m really confident in my store.”

Dallas Heltzell can be reached at 970-232-3149, 303-630-1962 or dheltzell@bizwestmedia.com. Follow him on Twitter at @DallasHeltzell.

The November 2016 general election is nearly a year and a half away, but the presidential race already is in full swing — as is a campaign in Colorado that could be just as contentious.

Will grocery stores finally be able to sell full-strength beer, wine and spirits, as they can in most other states? Voters likely will get to decide.

The two sides of the question already have launched power-packed public-relations pushes in what is a clash of two huge economic forces unique to Colorado: a large population of consumers who moved here from other states and brought their retail expectations with them versus a vibrant and ever-expanding Colorado liquor-producing industry — with 287 craft breweries, 75 craft distilleries and 65 wineries in business in the state — that depends on independent liquor stores to give its products exposure and promotion.

The two sides already are waging war on the web and social media, through “Colorado Consumers for Choice” for the supporters and “Keep Colorado Local” for the opponents.


On the Web

 Colorado Consumers for Choice

 Keep Colorado Local


“I don’t suspect we’ll have a problem getting the signatures in front of grocery stores” to put supermarket liquor sales on the ballot, said Chris Howes, president of the Colorado Retail Council and executive director of the Colorado Consumer Choice Coalition, the group spearheading the ballot drive. “We want…