Colorado Alcohol Retailers Face Changing Laws and Trends
It’s no secret that Coloradans love to imbibe. More than 10 percent of the nation’s craft breweries are found there, as are well over 100 wineries and about 50 distilleries. And while the state’s 1,600 independent off-premise retailers are happy to enjoy the fruits of this thriving industry, the state is also facing the biggest changes to its liquor laws since the end of Prohibition, leaving these small businesses wondering what’s next.

Last year saw liquor stores face off with grocers that wanted to sell full-strength beer and wine. Senate Bill 197, passed in 2016, allows grocery stores that have one full-strength alcohol-sales license per chain to obtain as many as 19 more over the next 20 years if they buy out all licenses within a 1,500-foot radius.

Over time, the bill could get rid of 3.2 percent beer entirely. The existing mandate that non-liquor stores sell only up to 3.2 percent beer—about half the alcohol content of many of Colorado’s craft beers—should be gone by 2019, the Colorado Department of Revenue says. Grocers with current 3.2 percent beer licenses would eventually be able to sell full strength beer, but no wine or liquor.

The Colorado Licensed Beverage Association, a board on which Hazel’s Beverage World sits—will have a seat at the table once that discussion begins in earnest. “For the guy who buys Bud or Coors Light, it’s convenient,” says Hazel’s co-owner Jimmy Dean (pictured atop). “I know lots of people who don’t drink, but I don’t know anyone who doesn’t eat. If you’re in the store and you have two screaming kids and you want to get home, you just buy the Bud Light; you don’t make a second stop for Crooked Stave. I sell Bud to pay the heat and lights. If someone goes to the grocery store and then has the intent of coming here but then they don’t, that impacts me.”

The thing people need to remember about the bill, Dean says, is that the only people asked to give up part of their livelihood are retail liquor stores. “What does Wal-Mart give up? King Soopers? The distributors? Nothing,” Dean says. “We didn’t write the laws; we only live by them. For the last 80 years, we played by the rules.”

Wilbur’s Total Beverage general manager Matt Dinsmore is the president of Coloradans for SAFETY, an allied coalition of independent liquor store owners, and treasurer of the American Beverage Licensees in Washington, D.C. He spent 18 months raising money to prevent “80 years of liquor laws being turned upside down.”

“We all sat down with the threat of a ballot issue over our heads,” he says. “If we went to a ballot issue, it would be 50/50 coin flip.” He says Wal-Mart’s polling showed 50/50, too: “They said, ‘If we lose and we spend this kind of money, we’re going to lose jobs.’”

SB197 is far from perfect, Dinsmore adds, “and we spent a lot of time cleaning up flaws—but it works.” He says the law protected the local liquor-store owner who happens to be right next to a Safeway from having Safeway quickly put them out of business. It also created value for some businesses, he adds, because a lot of them don’t have a succession plan. The compromise allowed local independent retailers who wanted to stay in business to stay in business; alternatively, it gave an exit strategy for those who wanted out.

“It saved, truly, about 1,600 small businesses from their head getting cut off overnight,” Dinsmore says.

The state’s evolving liquor laws have kept these stores on their toes in terms of differentiating themselves among vast competition and creating a shopping experience they say grocers can’t replicate.