Colorado: Colorado’s full strength beer bill battle still brewing

Source: Coloradoan

Nick Coltrain

June 23, 2016

Liquor stores aren’t quite jumping for joy over a compromise bill to phase in the sale of full-strength beer and wine at grocery and convenience stores, but backers of an initiative to completely open up the sales aren’t quite armoring up for a fight at the ballot box, either.

Leading up to the 11th-hour signing of the bill by Gov. John Hickenlooper, liquor stores and advocates for the status quo were gearing up for an advertising campaign fight to the tune of $50 million. Since then, the squall has simmered down to only troubled waters.

The Your Choice Colorado campaign, largely backed by King Soopers and Safeway, has been quiet since a June 10 statement calling it “flawed and unconstitutional legislation that only protects a handful of big liquor stores and liquor lobbyists,” and many of its staffers have moved on. The statement continues on to say the group will weigh its options, “whether through a legal challenge to this sloppy bill or as planned, taking it to the ballot in 2016.”

Representatives for King Soopers and Safeway did not return requests for comment on where the companies are in the fight.

In a nutshell, the new law allows grocery stores to start acquiring liquor licenses and eventually do away with limits on the number of licenses a chain can have. It has a phase-in period of 20 years. It will also end the 3.2 percent alcohol-by-volume limit on what grocers can sell. Currently, Colorado is one of only five states that sells 3.2 percent beer.

Phil Pringle, owner of Pringle’s Fine Wine and Spirits in west Fort Collins, said he would have preferred the status quo, but that this is better than opening up the system over night. That, he warned, would have led to probably half the liquor stores in town closing.

“A gradual phase-in is much better than the absolute greed and redistribution of wealth from Colorado-owned businesses to out-of-state corporations” that the ballot initiative would have spurred, Pringle said.

Sure, customers may see more convenience, he said, but the cost will be competition – fewer liquor stores to shop at and less shelf space for new and unique brews. Liquor store shelf space is often heralded as what helped perk up Colorado’s craft beer scene. Pringle remembers the first time the Odell family and New Belgium’s founders, Kim Jordan and Jeff Lebesch, first walked into his store hoping for shelf space – a proposition he thinks won’t fly nearly as well when corporate chains are in charge of purchasing.

“Our system has been like this since Prohibition and it’s worked,” Pringle said. “It’s evolved us to the point of having the premier craft beer scene in the nation.”

Mat Dinsmore, owner of Wilbur’s Total Beverage and one of the people leading the charge against the grocers’ proposition, noted it ultimately protects liquor stores from change that was likely coming, either as a slow-changing tide or a tsunami.

“It protects a lot of retailers from grocers who would be sharing a wall with you and selling the same stuff as you, when you have a lease, (small business) loans or a second mortgage on your home,” Dinsmore said.

This allows those businesses in particular prepare for the future, either via retirement, changes to their business or selling their license, he said.

“It really is an economy of scale,” Dinsmore said. “Our biggest thing was, as an industry, how do you try to ease the transition pain? The clock is ticking for some people. If you’re next to a King Soopers, it gives you time to sell your license, to retire, to plan the next steps.”

While those small shops that neighbor grocery stores will likely feel the brunt of the change, Dinsmore and Pringle acknowledged it will change their businesses as well. After all, their competition won’t just be local, but now grocery stores hoping to appeal to time-crunched consumers. Even then, Dinsmore is hopeful the looming war for voters will fall quiet.

“I really hope they come to their senses and realize, this is a historic compromise, it’s good for us if we wait,” Dinsmore said.